3 Ways a Profit First Coach Will Support Your Business Growth
As an entrepreneur, have you ever found yourself wondering where your money goes or trying to decide whether you have the funds to invest in something for the business? Or any other questions about your revenue and profit? Hiring a Profit First Coach may be the answer to all of your questions.
At Fisher Bookkeeping, we offer a range of business services as you establish and grow your company. From bookkeeping to payroll to CFO services, our team can help support yours. And with Profit First coaching, we can show you how to be profitable from day one.
Our offices around the US serve clients in many industries and all stages of business. Reach out today to learn more about how we can support your financial goals.
What Is Profit First?
Based on the book of the same name by Mike Michalowicz, Profit First (PF) is a method for managing your company’s cash flow. It relies on the premise that you need to account for profit before considering expenses.
It takes the traditional equation, REVENUE – EXPENSES = PROFIT and flips it.
Under the PF system, the equation is REVENUE – PROFIT = EXPENSES. With this method, you have a profit from the first dollar you earn, and you determine what you can spend on your company by how much remains after taking that amount.
This way of looking at your cash flow is contrary to how businesses have handled it for centuries. However, it’s also incredibly powerful and, you guessed it, profitable. Under a PF method, you will have at least five separate bank accounts:
- Revenue
- Profit
- Owner’s Compensation
- Operating Expenses
- Taxes
Following specified allocations that fit your goals and revenue, you move a percentage of your income into each of the other accounts. Each “bucket” has an assigned job for your money.
One reason this system is so impactful is that it also helps switch your mindset. When you are profitable right away, you feel and act successfully and make more strategic decisions for your company’s finances.
What Does a Profit First Coach Do?
As with any type of coaching, Profit First coaching aims to help you move from where you are to where you want to be in your business. A trained PF expert helps you implement the system, understand how it works, and keeps you accountable for following it. They are your cheerleader and partner as you set and meet your financial goals.
Be sure to choose someone trained and certified to provide Profit First coaching and, this is crucial, someone who uses the system! If they aren’t following the methods for themself, they aren’t likely to offer the level of support you deserve. Many bookkeepers and accountants use PF for their businesses and are excellent coaches.
Benefits of Working with a Profit First Coach
If you’re new to Profit First, having an expert help you get going is very useful. For those who are already using PF or who have dabbled in it, coaching can ensure that you’re utilizing it correctly and making progress toward your ideal allocations. Here are the top three ways a profit first coach can help you grow your business.
1. Your Coach Helps You Stay in Touch with Your Money
Many entrepreneurs fall into a bad habit of avoiding looking at their accounts. They may be keeping up with bills, but that’s about it. Opening up their banking app can bring anxiety and worry because they aren’t sure what they’ll see there.
A PF coach will help you see your money as a powerful tool rather than something to fear. Following this method, you handle your allocations regularly, usually twice a month. And your coach will probably encourage you to look at your account balances frequently in between allocation days.
When you spend time looking at your accounts, you can celebrate how well your money is doing its job to support your business. Removing the anxiety around your finances is powerful and liberating and sets you up to grow your revenue and profit.
2. Your Coach Helps You Strategize Your Spending and Pay Down Debt
It’s too easy for business owners to find ways to spend their money. However, it’s trickier for many entrepreneurs to find strategic ways to spend their money.
Your Profit First coach helps you identify areas to reduce your spending and expenses. Remember, you’ll be accounting for your profit first to see how much is available for your costs. If your Operating Expenses account doesn’t have enough to cover what you spend, your coach will work with you to make the necessary changes.
If your business has debt, as many do, working with a PF coach can assist you in paying down and eliminating your debt. With this system, you can free up more of your revenue so that you can allocate more to profit and owner compensation accounts.
3. Your Coach Helps You Prepare for Tax Season
Do you dread tax season? Are you scared of what your CPA will tell you each year? Your Profit First expert will help you avoid this anxiety by ensuring you are allocating properly into your tax account. With consistent attentiveness to your accounts, you will have a fund ready to pull from when it’s tax time.
For many entrepreneurs, this benefit of coaching is the most important. Tax season is full of stress for many business owners, so being able to feel prepared and confident instead is a huge relief.
Want To Learn More About Profit First for Your Company?
At Fisher Bookkeeping, we support and celebrate business owners no matter where they are in their entrepreneurial journey. We believe in Profit First and use it ourselves because we know how it empowers entrepreneurs to succeed.
Our team works around the country from our offices in Portland, OR, outside Lexington, KY, and near Chicago, IL. We are passionate about helping you grow, thrive, and reach your goals. Connect with us for your free consultation.
About the Author Barb Fisher
Barb is the CEO of Fisher Bookkeeping, an outsourced bookkeeping consultancy that provides small businesses with a full-service financial department. Her favorite aspect of work is to break down the accounting to meaningful bits, so entrepreneurs can make a powerful difference in their own business. She's also a power lifter (squat: 215, DL: 270).
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