It’s time to redefine and learn how to guarantee profit with every sale in your business, whether you’ve been in business 10 days or 10 years. Eight out of 10 businesses fail—most of the time because they don’t profit. While you might be thinking that the reinvesting you’re doing is helping you grow, it may actually be stunting your growth. In today’s episode, we’re going to face the truth about profit, how it might be the root of your biggest struggles and how to tangibly start guaranteeing profit in your business today.

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The Power of Profit

Profitability isn’t just a minor detail on a financial report that you don’t know how to read. It is a determining factor in the success of business. My heart behind this episode and this podcast as a whole is not just to make you more money….it’s to free you up to focus on what really matters. When you’re generating profit, you can do that.

When we don’t profit…

• We overwork. When we don’t understand our numbers, we don’t know when to stop or say no.
• We overspend. Without a plan or process to manage cash, we run out of money at the most difficult and inconvenient times.
• We underpay. When we don’t know our numbers, have the data or the confidence to raise our prices, we underpay ourselves.
• We argue. When we don’t know what’s happening with our money, we see a lot more tension in our relationships.
• We stress. Without a clear plan and understanding of our cash, the likelihood of stress increases.

Profit is a Choice

When we do profit, we prioritize life. When we know our numbers and manage cash intentionally, we are giving ourselves the freedom to build a business that supports our life. not the other way around.

Your business does not have to run your life. It doesn’t have to be the source of all of your problems. What matters more than your profit or finances is the life you were made to live and the reason you were put on this earth. The ability to live that life is largely affected by balance, which is directly affected by profitability.

Profit is a choice and decision that you can make today.

Start Profiting Today

Whether or not you’re ready to make moves, I encourage you to start profiting today. I’ll walk you through how simple it can be.

There are four main categories that you need to separate your income into: profit, salary, taxes, and business expenses. This approach is based on a system by Mike Michalowicz in his book Profit First.

In order to guarantee profit first and a paycheck, you need to start managing your money in percentages and bank accounts. Now to implement those four categories I mentioned, you need to have four bank accounts that align with them: salary savings, profit savings, tax savings, and business expenses. I also recommend you open an “income holding” account where all your payments are deposited, which makes 5 total accounts. It makes sense to use your current business checking as your business expenses or “operating expenses” account since most of your payments are likely already connected to that account.

Once the money comes into your income holding account, you’ll disperse it into the other accounts based on percentages like the following:

• 50% salary
• 5% profit
• 15% taxes
• 30% expenses

If you make more than $250,000 per year after materials and subcontractors, your percentages are a little different.

If you can’t match these percentages right now, that’s okay—you need to take an inventory of your current percentages and work towards these goal percentages. Once you’ve implemented these categories and percentages, it’s time to start taking a profit quarterly.

Hint: here’s how it becomes an emergency fund—you’re only going to give yourself half of that profit account as a quarterly bonus, but the rest stays in the account just in case.

Profit First can change your life, if you let it, but it’s something you have to choose.

Key Moments:

1:30 – Why Profit Isn’t Just About More Money

2:35 – What Happens When We Don’t Profit

4:03- Profit is a Choice

12:23 – Start Profiting Today

18:05 – Recap

Mentioned in this Episode:

Profit First

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Instagram: @val_marlene_creative

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