In this episode, Ryan discussed:
- What is the Profit First System?
- The good things about Profit First
- How bad habits defeat the system
- The really ugly parts of Profit First
Key Takeaways:
- In the Profit First System, Mike Michalowicz tells business owners to create five different accounts: a revenue account, a profit account, an owner’s pay account, a tax account, and an operating expenses account.
- There are two good things about the Profit First system that any business owner could benefit from. It ensures that businesses have profit and that there’s money set aside for taxes. It also helps business owners to shed bad habits around money and develop good ones.
- The bad thing about the Profit First System is that it’s easy to get around it. If you want the system to work, you have to never deviate from it or else it defeats the purpose. Transferring money around could get tedious, especially without an accountant that’s implementing the system.
- The really ugly part of the Profit First System is that every time that you grow your business, you’ll go up a bracket, you’ll be taking a pay cut initially and it will take a long time before you catch up. Also, the system doesn’t take into account inventory purchases. So when you run out of materials, you’ll have to take money somewhere you shouldn’t and that defeats the purpose of the system.
"When I get asked, “should I use Profit First in my business?” I think that it's not a one-size-fits-all, there is definitely a good, bad and ugly. I think that it serves business owners to a point." — Ryan Kimler
Schedule your free 1:1 Profit Breakthrough Session with Ryan here: https://go.oncehub.com/profit
Connect with Ryan Kimler:
Net Profit CFO Home Page:www.netprofitcfo.com
Email: ryan@netprofitcfo.com
Facebook:www.facebook.com/rkimler
LinkedIn:www.linkedin.com/in/ryankfinancialclarityllc/
LinkedIn NPC Company:https://www.linkedin.com/company/netprofitcfo/
LinkedIn FC Company:https://www.linkedin.com/company/financial-clarity-llc/
Show notes by Podcastologist Chelsea Taylor-Sturkie
Audio production byTurnkey Podcast Productions. You're the expert. Your podcast will prove it.
