Transform Your Business from a Cash-Eating Monster to a Money-Making Machine
The Profit First Formula
What if, rather than you serving your business, your business served you? What if you could turn a profit from your very next deposit? And what if you had the power to guarantee that profitability?
In just 60-90 days we can train you in all you need to know about your business cash flow and more importantly how to improve it! The improvements can start literally from day one having this process in place.
The GAAP (Generally Accepted Accounting Principles) formula for determining profit is Sales – Expenses = Profit. It is simple, logical and clear. Unfortunately, it’s a lie – or at least this perspective is not helpful. The formula, while logically accurate, does not account for human behavior. In the GAAP formula, profit is a left over, a final consideration, something that is hopefully a nice surprise at the end of the year. Alas, the profit is rarely there and the business continues on its check to check survival.
Sales – Expenses = ProfitSales – Profit = Expenses
With Profit First, we flip the formula to Sales – Profit = Expenses. Logically, the math is the same, but it is tactically different from the standpoint of the entrepreneur’s behavior. With Profit First, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses.
Don't change your habits, leverage them.
Many entrepreneurs try to force themselves to become better at accounting and to become more disciplined in their fiscal management by pure willpower. But just like a muscle, willpower can be drained. And in a moment of financial stress or bigger than expected expenses the entrepreneur will break their own fiscal rules and spend the money they have.
The Profit First principle does not try to change your habits (that is nearly impossible to do), Profit First works with your existing habits. By first allocating money to different accounts, and then removing the temptation to “borrow” from yourself, your business will become fiscally strong and you will benefit from regular profit distributions.
Strategic Training and Coaching
Hector is a certified Profit First Professional – one of several hundred throughout the world and the only one in New Zealand. Our proven expertise will help you make the most of the Profit First process & of your business.
To discuss our services further, book your FREE 15 minute Discovery Session.
“My experience of working with Hector & Davidson Fraser has been extremely worthwhile. The process of implementing the Profit First format has not only been of benefit to my business but it has had a considerable impact on my personal growth & development. This is mostly because of Hector's immense passion for his work & his ability to instill self-belief & self-confidence. I have found the process much easier than expected & could see the benefits immediately. I would recommend Hector to any business wanting to follow a simple process to ensure they are achieving their profit goals.”
Claire Maxwell, Pur Physiotherapy and Pilates (P3) Ltd