Those who are new to Profit First often ask us when to start using this approach in their business. At Exigo Business Solutions we are Profit First Professionals and our answer is this. When to implement Profit First in a new business or in an established business is right away!
The transition from your current “bank balance” method of bookkeeping to the Profit First approach is not difficult. And with a Profit First Professional at your side, the conversion can be efficient, quick, and painless.
Those new to Profit First may think that the method is just about setting aside a little profit before paying the bills. But, Profit First is a lot more. The financial discipline, improved budgeting, and better cash flow management that evolve in a Profit First system will change how you do business and change your business for the better. So, the time to start is always now!
Don’t I Have to Wait for a Profit to Institute Profit First?
The answer to this question is a loud and resounding no!
The problem in many a new business and many established businesses is that money is being wasted due to poor budgeting practices and sloppy cash flow management. When you allocate profit off the top you will need to take a closer look at expenses. If you are not already using it, we suggest that you start using QuickBooks and use QuickBooks custom reports to gain a clearer picture of your finances. With the Profit First method you will learn better budgeting and cash flow management.So, if you are not making a profit, the answer is not to delay using Profit First. The answer is start using it right now, take your profit first, and learn how to control the unnecessary expenses that have been steadily eating up your profit each and every bookkeeping cycle.
What If I Have a lot of Debt to Pay Off?
If you have multiple debts, consider the payments to be part of your expenses. We covered that subject in a YouTube video on how to pay off debt using Profit First. As we explain in the video, pay the minimum necessary on all debts from your operating expense account and use any extra remaining towards paying off the smallest debt first. Watch the video for the details. The point is that whether you have a new business, an established business, multiple debts, and a history of showing no profit, using Profit First will change all of that. When to implement Profit First in your business is right now!
If you still have questions or are interested in implementing Profit First in your business schedule a meeting with a Certified Profit First Professional today!