Easy Tips On How to Make your Profits work for You

October 19, 2017


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My passion is helping small business become more profitable and productive. I help by creating peaceful spaces In which clients can feel more productive and increase profits.

 

Now, normally I would focus a lot on the design aspect of increasing productivity. For me, it’s all about being able to bring peace of mind to each client. Today I want to switch gears with everyone and talk about.

 

Organizing finances in your business to ensure profits.

 

As small business owners, we all know the cost of starting up and maintaining a business. Production costs for each business can be slightly different. Expenses can vary from online tools to costs of creating goods along with any advertising expenses.

 

There was one tool I found that changed the game for me and how I look at my money. It was a book called Profit First by Mike Michalowicz.

 

Let me give you a quick overview of the premise of Profit first.

 

Mike explains why the GAAP The old style of accounting goes against human nature. It traps entrepreneurs in the Scary cycle of functioning from payday to payday. He also reveals why this new method is the smartest way to ensure your business is profitable. Starting from your very next deposit and moving forwards.

 

When you look at the old way of doing things, you would deduct your income from your expenses. This number would give you your profit.

 

Income – Expenses = Profits

 

So what do you do when the expenses start to grow and eat your profit? That’s when we decide to switch to a new model of doing things. Remeber the definition of insanity is doing the same thing over and over and expecting a different result.

 

Income – Profits = Expenses

 

The point is that you take whatever income you made for that payment cycle. You take that money and you deduct a predetermined percentage of profit. I like to do 15%. You do this before paying any bills. Lots of recommendations on these percentages are made in the book.

 

But what if you take profit first and then don’t have enough money left to pay your expenses? Then Captain Hindsight shows up to tell you that your income does not allow for those expenses. The next step is to cut what’s not essential.

 

In summary: Don’t settle hopes and promises in your bank account. Take your profit off the top, let what is leftover drive your budget.

 

Gaining profit on the home front.

 

In my house, profit first day happens every 2 weeks without fail. I also have set up a system where every 6-8 weeks I have a bookkeeper come in. It’s important to remember if you don’t want to do something, you need to find someone who will. Like the book says, Income – profit = Expenses,  I do everything in my power to make sure her visits productive.

 

Blog - Profit - handshake

 

The first step is to tailor your approach to the individual doing a task. As with my bookkeeper, I like to keep everything she needs in an upright filing folder. After her first visit, I made sure things like a stapler and paper clips and files were always in the folder. It was all about finding the most effective way to help her do her job and to maximize profits.

When everything has it’s place, less time and there for profit ends up being wasted.

 

Profit first Is a way to look at running a leaner business when you are starting out. Or If you are not making the profits you would like to see. It’s all about trimming the fat and paying yourself first!

 

When everything has it’s place, less time and there for profit ends up being wasted.

 

It’s all about trimming the fat and paying yourself first


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