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.
