Why You Must Practice Profit First

If you are not doing this – you won’t be doing, you or your business any justice. You will also, most likely, feel more stressed than you want to or need to. But when you do this not only are your finances in great shape but everything in your business works better.

What I am talking about is putting profit first.

Now, what do I mean by putting profit first? We all want to make a profit, don’t we? What most people don’t do though is implement this religiously. Whenever you are doing any planning in your business (or your home) you should know exactly what the implication of your decisions are on your profit. You need a profit-first mentality in all things.

This simple philosophy of profit first, has been identified by many different people in the past.

However, amazingly, I’m still finding that some businesses are not doing this! What they do is go through the required business processes. They complete statutory accounts on time. They may do a little bit of P&L reporting, or maybe a balance sheet to identify where they are from a day-to-day management standpoint. They do the break-point analysis, so they understand how much they need to bring in to cover all costs.

That’s all fine. But without putting the idea of profit first into every process, you are not going to be taking home what you want. And you will be reliant on banks for finance. Alternatively, putting profit first and building wealth, means you can grow your business in a self-funded way and not have to go to the banks for finance.

Why Put Profit First? …Read More