What is Profit First?

Profit First is changing how businesses think about their bottom line.

Mike Michalowicz founder of Profit First

PROFITABILITY IS A FAR BETTER MEASURE OF BUSINESS SUCCESS THAN TOTAL REVENUE.

What is a business without profit? It’s a hobby. Ouch. I know this sounds harsh, but without profitability your business becomes an albatross of expenses and extended hourly-work that doesn’t offer the reward of making enough money to sustain your living.

The principle behind Profit First is to change the way business owners think about their cashflow. It does this by flipping traditional accounting on its head.

The traditional way of thinking is:

SALES – EXPENSES = PROFIT.

Michalowicz reverses this equation, educating entrepreneurs to “put profit first’.

SALES – PROFIT = EXPENSES.

Why?

Because the traditional way of thinking doesn’t always equal to a healthy bottom line.

But isn’t this equation just a different way of getting to the same end point?

Yes and no. Yes, if the numbers stay the same you will continue to get the same result.

And no. If you re-frame the way you prioritize profit, you will get a better result.

How?

The shift starts with a change in your mindset. (Stick with me here – this is not just a woo-woo talk.)

When I speak to anyone about their finances, it starts with:

“Money is not complicated,

your relationship with it is.”

Lisa Campbell

Profit First is about changing your relationship to money.

It’s about creating a shift from money controlling you, to you controlling your money and keep more of it!

It’s about looking at the revenue that comes into your business, calculating the amount of profit you need

to thrive and then ensuring your expenses fit within your remaining budget.

*Nerd Alert*

Want to understand more?

The concept is based on Parkinson’s Law – ‘work expands to fill the time available to completion’.

This is an example of Parkinson’s Law:

If you are given 14 days to complete a project, it takes 14 days to complete. By contrast, you are given one

day to complete the same project, it only takes one day. We surprise ourselves with how much can get done in

a shortened timeline and feel pretty good about the end result.

Michalowicz applies this concept to your finances. You will spend the money you have left over after

expenses have been paid simply because you have it available. Your expenses, business expansion, or project

will eat up all the remaining money in your account, literally because it is there.

Flipping the profit equation on its head causes us to prioritize profit instead of ‘taking what’s left’. The

re-framing forces us to think differently about our spending habits. It requires you to innovate by creating the

same or better output, with less resources. This is called putting profit first.

I’m Lisa Campbell –

Wise-sage, meets kick-butt coach that puts you on the

fast-track to financial success.

I coach bookkeepers, accountants and entrepreneurs to build a profitable, systemized and sustainable business without losing sleep.

Ready to work with me?

Are you a bookkeeper or accountant that wants to take their business to the next level?

Are you looking to become a Profit First Professional in Canada?

Are you an Entrepreneur looking to work with a Canadian Profit First Professional?

FROM HOURLY BOOKKEEPER TO HIGH-VALUE ADVISOR

FROM MONEY GENERALIST TO CERTIFIED PROFIT FIRST SPECIALIST

FROM FINANCIAL BUSINESS OVERWHELM TO PROFIT FIRST ROCKSTAR