Money Makers Myth #008 – I Have Never Been Profitable Before So I Can’
Turning things around and making your business PROFITABLE NOW, is not some kind of Accounting woo-woo trickery.
It is just effective cash flow management.
By making profit a HABIT and ingraining it into your financial processes, you are fundamentally changing the way you manage your cash flow and hence the way you run your business.
You see, Parkinson’s Law show us that you will spend every penny that you have available and also stretch every pound/dollar in lean times to keep your business moving forward.
What I am saying is to remove your profit from your business before you make ANY other payments (you do this by setting up a separate bank account for profit then putting 1% of all income received into that bank account each week) and operate on (slightly) less.
You will have done this in the past, when a customer doesn’t pay and you still need to pay the bills, for example. You’ve already found a way to work a system like this.
And another way to think of it…if a client pays you £1000, and you can operate your business with that…then surely it’s not too much of a stretch to operate with 99% of that which is £990 (and 1% being profit)?
There is a saying “Nothing changes if nothing changes”. And if you don’t change the way you take your profit then you will never take a profit.
Thanks ever so much for taking the time to read my post I truly hope you’ve found it useful and insightful. If you have any questions feel free to contact us!
I am Annette Ferguson, CEO of Annette & Co. Chartered Accountant, Profit First Professional and creator of the Business Wealth Engine. We’re also SUPER social so don’t forget to follow. Here’s to your success!