Profit First Summary Chapter 3 - The Naked Truth

A big business isn’t necessarily a good business.

And despite the hype of unicorn tech companies, focusing solely on growth is, more often than not, a losing strategy.

You can’t rely on a big exit. They are the exception, not the norm.

Shift your focus from increasing your revenue to increasing your profit. Once you have a solid foundation, you can grow in a healthy way.

Several chapters from Profit First provide detailed how-to instructions. If I were to summarize them, I wouldn't really be summarizing them. I’d be copying what was written. This is one of those sections.

The Instant Assessment Form helps evaluate your business's financial health.

Get your free Instant Assessment calculator with instructions on use here:

https://www.samfury.com/instant-assessment-calculator

The Instant Assessment is critical for making Profit First work. Do not skip it!

If you are a new business, under 12 months old, then you can, and should, still use the Profit First system and complete the Instant Assessment Form.

In fact, using Profit First from the start will prevent you from developing bad habits.

For your target allocations, use 1% for the profit account, 50% for owner’s pay, and 15% for the tax account.

Every quarter, adjust your percentages to get closer to the recommended allocations.

Don’t worry about any advanced strategies until you’ve been in business at least a year.

After completing the Instant Assessment, you may come to the realization that your business is in financial trouble.

Do not give up. The fact that you’re still in business means it can be turned around.

If you think you can’t continue just yet, that’s okay. But at the very least, set up a profit account at a separate bank and, every time you make a deposit, move 1% to it.

When you are emotionally ready, continue with the rest of the steps.

The Instant Assessment is critical for making Profit First work. Do not skip it!

Get your free Instant Assessment calculator with instructions on use here:

https://www.samfury.com/instant-assessment-calculator

Read the next chapter here.

Buy Profit First here: https://amzn.to/4bEg0iQ