Profit First Nation Ep. 140- Doing Profit First Right vs Ish: Question & Answers
Danielle delves into dissecting 10 misconceptions or fallacies surrounding Profit First.
This cash management strategy isn't intended to function autonomously; instead, it's meant to be applied meticulously, adhering to its principles.
Fragmented utilization is not its intended approach.
In this episode, Danielle outlines ten instances of business owners misapplying or misconstruing Profit First. Be sure to revisit this episode for a great “how-to” reference.
IN THIS EPISODE:
- [00:17] Danielle outlines the ten myths or misunderstandings about Profit First. #1 What is the purpose of Profit First
- [03:34] #2 Slashing expenses to the bone
- [08:16] #3 Adjusting your allocations over time
- [11:33] #4 Treating Profit First as a one-size-fits-all system
- [14:12] #5 Neglecting taxes
- [16:37] #6 Misinterpreting the no-budget concept
- [18:09] #7 Don’t rely totally on percentages
- [19:58] #8 Profit First is not a quick fix
- [22:44] #9 Confusing your accounts
- [25:13] #10 Ignoring behavioral change
KEY TAKEAWAYS:
- A business without profit will not last. Profit First is a cash management system that keeps your cashflow on track.
- Profit First is not a set it and forget it system. You need to adjust your allocations at the start of each quarter and adjust as your real revenue increases to the next level of target allocations
- If you don’t follow Profit First to the letter, you aren’t doing Profit First right.
ABOUT THE HOSTS:
Danielle Mulvey is a former flight attendant-turned-entrepreneur and owns multiple businesses doing $50 million in annual revenue. She is one of the exclusive, select group of Mastery-Certified Profit First Professionals worldwide and the go-to “HOW TO IMPLEMENT” workshop facilitator for Profit First and WSJ Journal best-selling author Mike Michalowicz following his keynote speeches. Danielle is currently running multiple businesses, from start-ups to mature businesses with 10-year plus track records and revenues ranging from $1M to $40 million in annual revenues and is a certified numbers geek about Profit First, leveraging the DIY cash management system for small business to achieve maximum profitability. She can personally guide business owners to achieve maximum profitability based on her 25 years of experience as an entrepreneur who has been there and done that.
Additionally, Danielle authored the book The Rapid Read™ Guide to The 5-Star Employee Rating System™ and is currently collaborating with Wall Street Journal best-selling author Mike Michalowicz on his new book, to be released in Q1 2024, titled ALL IN: How Great Leaders Build Unstoppable Teams.
Mike Michalowicz is an entrepreneur and New York Times and Wall Street Journal best-selling author of Profit First, The Pumpkin Plan, SURGE, Toilet Paper Entrepreneur, Clockwork, Fix This Next and Get Different. BusinessWeek called Toilet Paper Entrepreneur, a business cult classic. His books have been translated into ten languages, and Mike has had the privilege to speak on stages worldwide because of his passion for connecting with entrepreneurs.
As the founder of Profit First Professionals, he empowers accountants, bookkeepers, and business coaches with the tools and techniques to maximize client profitability, allowing them to uplevel from being one of the 83% of small businesses operating check-to-check and struggling to be profitable to becoming one of the 17% of thriving and highly valuable businesses with cash in the bank to correlate to profitability. Mike also co-founded the business growth consultancy Provendus Group and has successfully founded, built, and sold two technology service-based companies. He is passionate about sharing his experiences and advice with entrepreneurs and sits on formal and informal advisory boards while maintaining relationships with angel and early-stage investors.
RESOURCES:
Profit First Professionals - Website