Financial Clarity at Your Fingertips: The Profit First Instant Assessment

Do you find that you're often juggling cash to pay your business bills? Or that your books say you've made a profit but you never seem to have any cash in the business? 

It's an all-too-common scenario for small business owners. 

But there's a solution. It's one that we use in our own businesses, and it's what we teach our clients to do in theirs. It's called Profit First.

What is Profit First? 

So, what exactly is Profit First? It's a cash flow management system, but it's not just that. It's a whole different way of thinking that that can revolutionise the finances and the profit in your business. 

At its core, Profit First is about one simple principle: putting profit first, before anything else. Developed by renowned author and entrepreneur Mike Michalowicz in his book, Profit First is the secret ingredient behind the financial success of small businesses around the world.

Profit First method flips the traditional formula of sales - expenses = profit on its head. Instead, it encourages you to prioritise profit, ensuring that your business remains financially stable and profitable.

What is an Instant Assessment? 

Now, let's talk about the Profit First Instant Assessment. This tool is a quick and easy way to evaluate your business's financial health. It's like a check up to see how you're currently performing, which you then compare to financially healthy businesses. This is a first assessment where you figure out the areas that you need to improve in. 

It's super simple to use. You don't need to be an accountant to benefit from it. Anyone can do it in just a few minutes. 

How does the Instant Profit Assessment Work? 

You start by getting clear on where you spend cash in your business. You take your total revenue, then your materials and subcontractor costs to work out your real revenue. Your real revenue is the amount of money that you have to run your business on. 

From there, you plug in the numbers and take a look at how much you're spending on operating expenses, owner's pay, tax and most importantly - how much profit you're making. You then calculate these in percentages. These are called your allocation percentages. The amounts you're spending in different areas of your business right now are called your current allocation percentages (known as your CAPs). 

Then you compare your business with other businesses of the same size, and where they allocate their spending. These are called the Profit First percentages. For most business owners, this process is a big eye opener. You might find that you have negative numbers in some of areas, which means that you're actually losing money in the business. 

What you will be able to see clearly is exactly where you need to make improvements. Once you figure out your current allocation, you can start to work out your target allocation percentages (your TAPs). This is where you decide what you need to spend in each area of your business to get you closer to your goals. By moving our TAPs each quarter, we can improve our businesses over time. 

Why is the Profit First Instant Assessment so important? 

It can be painful to look at the results of your assessment and realise that you're not doing so great. Shining a light on exactly where you're going wrong can be uncomfortable. But it's exactly this clarity that you need. 

Your profit journey is just like any other journey. You can't get to where you want to go if you don't know where you are now. Painful as it may be, this is the first step in your journey. Work out where you are now, then you work out where you want to get to. From there, you can reverse engineer the steps that you need to take to arrive at your destination of permanent profitability. 

How to do the Profit First Instant Assessment? 

You can do a free Profit First instant assessment right here.   

If you want to do a full Profit First assessment, book in a call for a free 15 minute strategy session to find out how to get started. 

Next Steps

So, what's the next step for you? If you think this sounds like a good idea, it's time to take action. Choose one of these:

Do an instant assessment. 

Read the first two chapters of Profit First, free. 

Read more articles about Profit First. 

Remember, if you know but don't do, you get the same result as not knowing at all. 

So get started with prioritising profits, achieving financial stability, and using your business to support the lifestyle your dream of. We know that change can be scary, especially when it comes to your business's finances. But we're here to support you every step of the way. We believe in your potential to transform your business and achieve the financial success you deserve - because that's exactly what we do with our clients, too. 

Your journey to financial success starts today.