Why Taxes and Owner's Salary Matter

 ”Those of us who embrace Profit First as a way of life, we force ourselves to get creative with the money we have left over in the account for operating expenses.” – RJon Robins, author of Profit First for Lawyers

In this episode, Joam Alisme shares why implementing Profit First was the right choice for his firm and why it’s time for fence-sitting law firm owners to take the leap. As RJon explains in the featured clip from the Profit First Summary chapter in the book (page 165), “We believe it’s better to make tough choices in business than to have to make tougher choices at home.” Joam’s story proves this point, by choosing to follow Profit First methodology, he has transformed his practice from a $60,000-a-year firm in 2020 to a firm that is approaching seven figures just five years later.

The Five Foundational Accounts

In the clip from the audiobook recording session, RJon explains how the Profit First methodology operates with five foundational bank accounts:

1. Main Income
2. Profits (starting with just 1%)
3. Owner’s Salary
4. Taxes
5. Operating Expenses

By separating revenue into these accounts, law firm owners naturally embrace financial portion control, just like Mike Michalowicz’s grandmother used to separate the family income into different envelopes for different purposes.

From Scrambling to Systematic

Joam shares how he went from scrambling to pay taxes to having a systematic approach with dedicated accounts. Starting with just 1% for profit, he gradually increased the percentage as the business grew. The results speak for themselves: travel to exotic locations, paid-off credit card debt, student loans nearly gone, and purchasing his first property – all while growing his law firm.

Resource: Profit Leak Assessment

The Profit Leak Assessment is a practical, on-demand course to help law firm owners find thousands of dollars in potential profit leaks. Karli teamed up with Evelyn Aucoin, Financial Literacy and Strategy Expert with How To Manage A Small Law Firm, to create this resource for law firm owners. Click the link below to start plugging the profit leaks in your firm. Your future self will thank you for it!

Connect and Engage:

• Connect directly with Joam Alisme: https://alismelaw.com
• Mentioned: Mike Michalowicz
• Subscribe to the Profit First for Lawyers podcast
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• And most importantly, order your copy of Profit First for Lawyers today!