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Why Profit First?

Cash eating croc

Has your dream farm turned into a cash-eating nightmare?  

Lack of simple systems & processes to manage our resources efficiently means we flounder around losing precious money, time, sleep and then, most often, fail. 

With farm chores, marketing, and family, who has the time or energy to mess around with analyzing financials or spreadsheets every day? 

Not me and I am an accountant with 30 years successful business experience as well as a QuickBooks Pro-Advisor who knows how to keep books, read financials, and use numbers to make decisions.

I needed laser-focused attention on building a market for our heritage breed birds if I wanted them to become financially sustainable.

Shifting numbers on paper worked when I sat in an office all day but it was just not helping me manage my day-to-day budget for a farm with multiple enterprises, revenue streams and expenses.

I other words, the old way was distracting, sucked up time, and was too complicated.

I needed clarity & time savings in a simple package.

The search began to find ways to simplify management of my cash & budget, automate my bookkeeping & marketing, and to develop an intentional working business plan that reflects my values, personal goals, and dreams.

Cash is the lifeblood of any business so getting that cash-eating monster under control was first on the agenda. 

I needed a simple solution for the day-to-day management of my cash that I could interpret on the fly with a single glance - not a spreadsheet that I had to manipulate to see how I performed.

I found the solution to my cash flow woes in the book “Profit First” by business author Mike Michalowicz.

Profit First is a simple cash flow management system that uses bank accounts to form a dashboard so you can see your budget in real-time when you look at your bank balances.

Profit First is like the tried & true envelope system to manage a household budget where you allocate your paycheck for your expenses into envelopes but is tweaked to work for a business.  

Simple, free, and time-tested - BRILLIANT!

I was skeptical but decided to dip my toe in the water by opening an Income Account where all money is deposited into it then it is used as a serving platter for your other accounts (buckets, envelopes).  I was not disappointed!

Like many of you, I had income from several different sources at that time – market on Square, website on Shopify, chick orders on PayPal, and some orders used QuickBooks payments. 

All deposits went into the checking account my bills were paid from and on random schedules which meant lots of mental math!  

It was a mess that provided no clarity or into where my cash was coming from or going to.

When I started depositing all revenue into the Income account, I could clearly see how much money was coming in and if I was meeting my income target for the week to pay my bills at a glance.  For the first time in all my years of business, I could quickly see if I needed to ramp up my marketing or could relax a little.

It is amazing how much clarity one simple bank account can bring and how much that clarity reduced my stress levels and increased my ability to focus on marketing.

Check with me next week to see what the next Profit First accounts I set up and why.

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