Profit First drives Growth and Success
How Profit First drives Growth and Success!
Many business owners devote endless effort to make customers happy and give endless support to build a winning team of employees. Often, in our ambitious quest for growth and prosperity, we pay vendors and employees first, and then take some of whatever dollars that remain for ourselves. This approach is a recipe for financial disaster, especially as many business owners fall short of building the necessary savings for their long term future.
Data gathered by SCORE shows that 34% of small business owners do not have retirement savings plans for themselves, and 40% of business owners are not confident that they will be able to retire before the age of 65.
Moreover, 72% of businesses with 10 employees or fewer do not offer retirement plans to their employees.
One way to flip the script on those statistics is to employ the Profit First system, in which business owners take a percentage from each sale as profit. The traditional profit formula deducts expenses from sales, leaving the remaining amount as profit. The method is simple. Originally developed by author Mike Michalowicz, this plan says that every time you get a deposit from sales, take a predetermined percentage of that money as profit. Of course there are a few more steps than just that. But even with the simple first step, of taking your profit first, you will become permanently profitable. This method completely changes the normal scenario in which business owners typically spend money and take whatever is left as their profit. By putting away your profit first, the rest of the money is budgeted for expenses. This forces you think deeply about every spending decision.
It forces us to innovate by creating the same or better output, with less resources.
Implementing this idea requires a comprehensive strategy, but if you are looking to do things differently, or learn more about how this system can help you, please reach out because, at Beyond Common, our job is to inspire and empower women business owners to look and feel their best so they can achieve their personal version of success.
If you would like to know more about our courses and how we are an important resource for women business owners, leaders, and their teams check out our Beyond Common Goal Setting Guidebook Training.
To learn more about the Beyond Common Business Secrets Podcast, or to download recent shows, or to get your free copy of the 12 Business Success Secrets You Need to Know, please visit www.BeyondCommonBusinessSecrets.com
Thanks for being here!
Tracey Watts Cirino