Solopreneuers, small business owners, and Fortune 500 companies all have one thing in common: finances. Don’t run for the hills in fear of this topic, we are here to help! Finances are a hot topic in business, with good reason, but you can’t have a business for long if you don’t also make a profit.
Want to know how WISE has made a profit every year? Here’s our secret…
Have you heard of the book “Profit First?” Written by Mike Mackawitz, his goal is “to transform any business from a cash-eating monster to a money-making machine.” By focusing on cash flow, the profit first method ensures that you get paid and make a profit, no matter how small the income is!
There is a big difference between making money and making a profit.
So what is profit?
By definition, profit is Sales – Expenses = Profit. However, with the profit first system, we adjust the formula to equal Sales – Profit = Expenses. On a physiological level, if you have to keep expenses in a certain budget, you will. Flipping this equation changes our priorities.
What's the point?
As a business owner, when you are disciplined enough to set aside revenue for profit and only spend the remainder, you will make better decisions. You will spend smarter and you will work harder. You will scale at an appropriate rate, and become one of the businesses that avoid going out of business in the first five years.
Roughly 50% of businesses fail within the first five years. With profit first, you can be one of the success stories.
Want to get this implemented for you?
Talk to one of our financial specialists about getting your systems set up and your mindset shifted!
Diana is the Executive Director of WISE Advise + Assist Team. She focuses on all things vision, finance, sales, and operations. She has a Bachelors from Vanderbilt University and is currently working toward her MBA. She is a mom of two, been married for 7 years, and enjoys sports and the outdoors.