In my line of work, it doesn’t take too long for me to discover the financial health of the companies I work with. I can tell who is running a profitable business, who is possibly six months away from shutting their doors and who’s taken on too much debt. These aren’t judgments I’m making — more so, a professional assessment of the critical financial numbers that support a business.
You may think CPAs and bookkeepers are all about the numbers, accounting rules and best practices and understanding our tax system inside and out. While we do care about these areas, there’s a growing number of us from across the country who champion a new way of working with business owners by helping them put profit first.
What is a Profit First Professional?
In October 2019, I became a certified Profit First Professional so I could coach business owners on better ways to manage their cash flow, reduce the financial stress so many talk about, take responsibility for every dollar their company earns and spends — and, ultimately, run more profitable businesses.
Profit First, in case you haven’t heard of it, is both a best-selling book and a business finance philosophy created by Mike Michalowicz. I read the book and knew immediately that this approach could make a difference in the lives of my accounting clients and other Frederick-area business owners I come into contact with.
As a Profit First coach, I help people understand and adopt the principles of Profit First — and one of the core concepts starts with your banking practices. With Profit First, you establish separate bank accounts for operating expenses, owner’s pay, taxes and profit, along with keeping a primary account for all business income.
While this may sound like extra work, it’s the best way I know to get a business on to the profitability track.
Why Focus on Business Profitability
Here are a few indicators that Profit First could be right for your business, based on my experience as a CPA working with many small- and medium-sized businesses over the last decade:
- You’re disconnected from your business’ books and aren’t really sure how you’re doing financially.
- You haven’t paid yourself a fair wage in months and sometimes skip paying yourself altogether.
- You frequently get behind on paying bills and often “borrow from Peter to pay Paul.”
- You hope to open a second location or rent a bigger space, but you’re not sure if you have enough funds to do so.
- You’re reading this blog post in April 2020 and are struggling in today’s current climate. (Read my time-sensitive advice for the Frederick-area and nearby business owners my company serves.)
Take This First Step to Be Profitable
If your business is struggling to be profitable, working one-on-one with a Profit First coach can be transformative. I hope my brief explanation of Profit First piqued your interest. (You can find more info about Profit First here on our website, too.)
Are you ready to learn more? If so, let’s talk soon. Book time on my calendar, and I will be in touch!