What is Profit First?
Profit First is a sound business principal methodology established by entrepreneur Mike Michalowicz.
Cash flow is the number one reason why small businesses shut their doors for good. Profit First allows a simple approach for businesses of all sizes to effectively manage cash flow allowing for greater control over expenditures. Most importantly, Profit First ensures that a business owner no longer works for pennies. Perhaps you are that business owner who gets paid only if there is still money left in the bank after payroll is run and the other bills are paid. Let’s turn that around!
Why Profit First?
Implementing Profit First for your business:
- Gives you an in-depth look at your expenditures on an ongoing basis, ensuring they are appropriately in-line with the revenue your business is generating.
- Helps you eliminate business debt, freeing up more cash on a monthly basis (as well as the stress you often feel from having that debt).
- Gives you the tools to ensure the long-term profitability of your business,
- Ensures you, the business owner, get paid not only for the work you perform in your business, but for the profits the business generates.
Traditional Formula
Any traditionally trained CPA or bookkeeper will tell you Sales minus Expenses equals Profits. The flaw in this formula is the entrepreneur’s human behavior: “If I can just sell more, I’ll have more money to pay all my bills”, “Every expenditure I have is necessary”, “As soon as we reach this next milestone, there will be enough money to take home what I should be making”. If this sounds like you, you are not alone. Traditional accounting practices have set you up to think this way.
Profit First Formula
As its name suggests, this formula prioritizes profit! No longer is profit an afterthought once all the expenses have been paid.
Your grandparents may have used the “envelope system”. If there is money in the envelope, you can spend it. If the envelope is empty, there’s no money to spend. Profit First uses bank accounts with this same philosophy. The simplicity of the model allows you, the business owner, to focus on your business instead of worrying about cash flow.
Allocation percentages are set up starting with the current state of your business and are adjusted on a quarterly basis until your business has achieved a fully healthy state which includes paying you for the work you perform in your business, all of your personal and business tax burden and the profits for the risks you have taken in running your own company.
How Can Sum of All Numbers Help Your Business Grow?
Sum of All Numbers is a team of highly trained, certified Profit First Professionals and bookkeepers. Their core responsibility is to guide business owners and entrepreneurs toward improving cash flow and ultimately ensuring long-term profitability for their companies.
Our firm is one of the few organizations that have received Master Level Profit First certification as well as Pumpkin Plan (Business Growth) Strategy certification. We can guide you with the methods to make your business more profitable. We will do this while also managing your accounting, reconciling your books, providing accurate financial statements and coaching you throughout the entire process. We view ourselves as part of your team.
We offer valuable business insights to help you beef up your profit and, at the same time, increase your efficiency. We will perform our thorough evaluation and present you with a detailed plan of action to fix issues and loopholes that might be present in your books.
Call or email us to see how we can work together. What are you waiting for? Let’s get started! No strings attached! We want to work with you as you steer your business towards your dreams and goals and more profitability!
Certifications
Profit First
Certified Master
Fix This Next
Certified
