Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

1. Use Small Plates – When money comes into your main operating account, immediately disperse it into different accounts in predetermined percentages. Each of these accounts has a different objective: one is for profit, one for owner pay, another for taxes and another for operating expenses. These are the four basic accounts and where you should get s

The goal here is to work your money in small steps. First, ensure that your company of one is making enough profit to cover your living expenses. Second, make sure you’ve got enough of a runway buffer built up to work full-time at your company of one, even if things get slow. Third, with your salary and runway buffer covered, you can reinvest money

Adequate gross margin is key to running a profitable business and must be measured every month. The Net Income Statement is the only statement that tracks this. Fixed expenses don’t change with sales volume. Keep these at a minimum and no more than 20 percent of net revenue each month.