What is Profit First?

Ask any entrepreneur and they’ll tell you – owning a business is hard. Whether it’s a small business selling handmade blankets or a large business running manufacturing lines, there’s one question that all business owners have asked themself (and if we’re being honest, most of you probably still are): how am I going to pay myself?

Profit First is a cashflow method used by entrepreneurs to manage the money flowing in and out of your business. At its core Profit First is a step-by-step process to guarantee you will always have the right amount of money in the right place at the right time for the right purpose. 

Sounds complicated? Here’s the good news – it’s not. In fact, Profit First is based on just two concepts:

• Paying yourself first so you don’t put yourself last
• Grandma’s Envelopes

Okay, I understand I should pay myself first so I don’t put myself last, but how do I do that when every month all the money we’re making is going back into the business?

That’s where the second concept comes in – the idea is similar to stories of household finances back in the 1950s, where Grandpa would come home and give Grandma money for buying groceries, paying bills, and household needs. Grandma would take that money and put it in an envelope, and that was the money she had to run the household for the month. We’re taking that general idea and applying it to your business, guaranteeing that you will actually start paying yourself for the work you put into your business. Our clients are successfully running Grandma’s Envelopes in both multi-million dollar businesses and in those just getting off the ground.

Want to know more? Please follow us on Facebook, LinkedIn, and here on our blog to get the first look at our educational content.

Want to know more and don’t want to wait for the next blog post? Book a no-cost Discovery Call with us here to learn more about Profit First and how it can help your business succeed.