In this episode, Tim Seymour sits down with Jason Withers and Deb Halliday to unpack the Profit First system — a simple yet powerful way to take control of your business finances. Together, they explore how flipping the traditional accounting formula on its head can transform profitability, sustainability and peace of mind.

You’ll learn how allocating income into separate accounts for profit, owners pay, tax and operating expenses creates clarity, discipline and long-term financial health.

Jason and Deb also share the real behavioural shifts needed to make Profit First work — and how partnering with a certified Profit First Professional can make implementation smoother and more effective.

Key Takeaways:

• Profit First helps business owners prioritise profit from day one.
• Separating money into dedicated accounts brings clarity and control.
• Regular review and adjustment are essential to keep the system working.
• Implementing Profit First encourages smarter, less stressful financial decisions.

Foreign.

Welcome to Profit first beyond the Book, a podcast that takes you beyond the book with Profit first, brought to you by Tim Duncan and the rest of the Profit first professionals UK and Ireland.

And once again, members of the Profit first team are here with me in the guise of Jason with us and Deb Halliday.

Welcome to both of you.

Thank you for joining me.

Hi there.

Hi, Tim.

Hi, Jason.

And so today I'm going to call this a special edition, you know, because the whole point of this podcast, Profit first beyond the Book, is to take people beyond what they can learn from the book Profit First.

But what we haven't actually done is talk about the fundamentals, the basic concepts and the behaviors that sit behind the whole strategy of Profit First.

So we're going to strip it right back today and we're going to talk about what Profit first is.

So I'm going to come to you first, Jason, and I'm going to just pose the question, what is Profit first.

Cash management system that basically helps us all have much healthier bank balances, business and personal.

There we go.

Short and sweet for me for months.

That was a fantastic answer.

And this wasn't rehearsed either, by the way.

So that literally just rolled off the tongue because you're so used to answering that question.

I would say, I think it's.

I think it becomes endemic.

It's.

It is definitely about the iterations and doing the reps and seeing the circumstances and so on, but I think it really just enforces how straightforward and simple a.

A system it can be.

Doesn't necessarily mean it is easy to apply, but simplicity very much sits at the core of it.

So, yeah, highly effective cash management system.

Thank you.

And Deb, have you got a different way of framing what Profit first is, or would you just agree with what Jason said?

Yeah, I agree with what Jason said.

I'm trying to think what I would say, what I say when people ask me.

And same simple cash management system allows you to instantly see if you've got enough money to cover tax owners pay profit.

What was the other one?

Opex.

See, the least important of the lockdown.

There we go.

We just missed that one off.

There you go.

Well, do you know what that.

It's funny you say that, isn't it?

Because there's a human behavior right there.

What comes last gets forgot.

And this is part of what Mike writes about in the book, isn't it?

And when people read the book, they come away with the kind of idea that, yeah, that's easy.

It's Just popping money into pots.

So pots were calling, referring to bank savings accounts, but actually there's so much more behind just popping it into pots.

Because if it was just popping into parts, everyone would be doing it, everyone would be successful and everyone would be highly profitable, have all the money they wanted, better pay themselves what they wanted from the business.

But we know that's not actually what's happening out there in, in the world of business right now.

Too many people are stuck in that month to month cycle where the money is coming into their bank account and it's then disappearing very quickly because they've got bills to pay, they've got salaries to pay, they've got paye to pay, they've got tax to pay, they've got operating expenses to pay, they've got overheads and then at the end of the month, what's left they pay themselves.

And it's never enough money, it's never enough.

And then the month starts again and they're fighting to bring the sales income into the business as fast as they can because the direct debits are due, you know, and all of a sudden it's just that cycle that goes around and around and around and, and it creates stress, it doesn't create a happy working environment for the business owner because there's constant pressure on them from a financial perspective.

But with profit first, when you suddenly start to move money into different areas and you're giving those every pound that comes into your business, you're giving it a purpose, you're giving it a reason as to what that's going to be used for.

The most important one, of course, is to be able to pay yourself first.

Because paying yourself first means you're taking care of yourself.

When you set yourself up in business, you have a dream, you have a vision, you have an idea of where this is going to take you, you certainly don't intend to be an employee of the business because that's probably what you've tried to escape with setting up in business.

But if you don't pay yourself properly from the word go, you are creating a monster that you're a slave to and therefore you become an employee, don't you?

So you know that for me is, is really fundamental in what, what we're trying to help business owners remove themselves from that month to month trap.

But does that, how does that sound, Deb?

Does that kind of sit right with you?

How inclined to phrase that and explain that?

Yeah, yeah, exactly.

Goes back to the primacy law, doesn't it?

I mean, we Set up our businesses to put ourselves first, really, whether it's time, money, autonomy, or our mission for our purpose, if you like.

So why wouldn't you put yourself first when you pay yourself?

Because you're the most important employee of the business.

So primacy law, as you say, Tim, what you put first, you concentrate on.

You focus on, don't you?

And you can't leave yourself to last because if you leave yourself to last, you're an afterthought.

You're not taking care of your fundamental needs and that's to cover your domestic living.

You can't run an efficient business and achieve the purpose and the goals that you set yourself if you're not looking after yourself first.

So yeah, I completely agree.

Absolutely.

And so that takes us to the, the accounting formula, doesn't it?

You know, so obviously everybody follows this traditional tired formula and way of laying out a set of accounts that says you take your sales, you take off your expenses and what's left is your profit.

More often than not, you find out your profit six months after your year ends passed by.

You've got three months then for the tax bill that will become due and you go to your accountant and they say, well done, you've made a profit.

But it means nothing to you.

Because the first question that most business owners will ask their accountant is, okay, I've made a profit, but I don't really understand where's the money for that profit?

And you can't answer because you kind of embarrassed me, laugh and say, well, it's an accounting profit, it's not real money.

And that's madness, isn't it?

I've had these conversations myself, by the way, in the past before I found profit versus profit versus professionals.

But it's madness.

And then the next question is, okay, so I've made a profit, does that mean I've got a tax bill?

Yes, you have, yeah.

And it's this amount of money and by the way, it's due in three months time and you've got nothing set aside for that tax bill.

And all of a sudden that you've gone from that month to month pressure of keeping everything moving and paying your bills and then fighting to bring money in to, wow, now I've got to find this money as well.

And, and it just hits you hard between the eyes.

And that from an accountant and bookkeeper's perspective, that's not providing a good service to your client.

Whereas if your client and you are helping them implement profit first within their business, they're going to be able to look ahead and be proactive about what's coming.

And they will have the cash for their profit.

So with profit first, we flip the formula.

And so what we're saying is, sales take your profit first, and what you're left with, you run your business on.

So it becomes sales minus profit equals expenses.

And the reason for this is you're telling your business how much profit or what percentage of profit you're going to make from your sales income from the word go.

And that money is going into a separate bank account, which means we are now putting the money aside for the profit.

So when we get to the end of the year and we find out we've made a profit, we already know because we've got the money for it, or we've already rewarded ourselves each quarter for it.

But let's not get too technical too early.

You also will have the tax set aside because you know that's coming.

But the reason that we take our profit out first is so that we're squeezing the amount of money we've got left to pay and run our business on.

So therefore, we're creating this innovative behavior.

How can I provide, bring all of this sales income into my business by only spending this amount of money?

And I think that's the key aspect of profit first for me, it really creates that way of, okay, I've got these expenses, but I don't necessarily need all of them, you know, so let's look at our expenses as investments.

Let's see, what am I investing in with this business for why am I paying this company for that?

Why am I subscribing for that software?

Am I using it?

What am I getting from it?

And to start asking those questions then squeezes down your operating expenses.

And that's because you're taking money out of the business before you start spending it.

Jason, is there.

Do you think I've captured the formula?

The primacy effect of what comes last gets forgotten in the conversation.

Yeah.

Fantastic.

There's one little piece that I'd add on and take you back to something that you said earlier on actually, Tim, which was this idea that we go through the monthly cycles and then whatever is left, business owner pays themselves.

And as you were saying it, I'm kind of stood here thinking maybe, because I think in my experience, a lot of business owners don't pay themselves at that point, and they definitely don't have an idea of how much they could pay themselves.

So I think for me, a lot of it actually comes back to this idea that people are going through a cycle and have no core understanding of what is actually available for them.

So the tendency then becomes to live in fear, not take too much, because I don't know what else I might need it for.

Paying suppliers, paying tax, whatever those things might be.

So I better not pay myself anything, actually, because I really can't see what I'm going to need it for, which then as you say, really turns into the double whammy.

Sat with the accountant who says, oh, by the way, and you do have a tax bill for money that you don't have, and it's due in next to no time.

So we kind of get caught at two ends of not paying ourselves in the interim for fear of what's coming.

And then when we get told it's coming, we don't have anything with which to deal with it.

So I think that, for me, very much rang true in what you were saying is a slight extension of that argument, really.

I think most business owners fundamentally run blind.

They cannot see what they actually have for most purposes, let alone for themselves.

And I think this.

This whole idea that as we bring money in, it really does have a point of focus.

I mean, there's all sorts of avenues we could go down here about education of people and, you know, what it takes to run a business.

Running a business is not easy.

You know, there are a lot of moving parts.

Most people get into business because they're good at the thing they're good at.

For most people, they would say that's probably not money or the financial end of it.

And let's face it, at the end of the day, marketing and sales definitely sounds like more fun than finance anyway, you cut it.

So, you know, therein lie the tendencies of where people tend to spend their time.

So I think one of the massive benefits here is giving people clarity.

You know, as Deb said, that ability to look at a bank balance on your phone, know exactly what it stands for, how much is available, that's everything at the end of the day for a business owner.

That level of clarity is an enormous shift in a business and the vision that people have proper transformation.

Absolutely.

Do you think it's a good time to talk about Parkinson's law right now and explain about one bank account moving money out of it and how that works.

Who wants to talk about Parkinson's Law?

I think I've talked quite a lot.

Okay, I'll give dead first option, seeing as I just asked.

That's why I'm happy to do it.

But I was going to Follow on from what Jason was saying.

When the sales come in and they don't pay themselves, so they don't pay themselves, but they end up spending too much because they see shiny object syndrome or they think that other things are going to help them in the operations of their business.

They convince themselves that they need to be spending money to make money, which is a myth.

So it becomes perpetual.

So as the sales come in because they've built up their expenses too much, they haven't left room to pay themselves, so they chase the sale.

So in.

Really, it's kind of like reverse Parkinson law, isn't it?

Because what they've done is they've got the money coming in, they've spent too much and left themselves too little to pay themselves with and not, not set aside for tax either.

So that's the opposite of partisan's law.

In my, my mind, in my mind, it should be they should be spending as little as possible because then that leaves them money to pay themselves more.

So.

So having the big plate, all the money in the, all the money in the one pot is too tempting for them to just spend it.

So they need to separate it out so they know that they have a rationed expenses pot.

And the most important thing is profit and owners pay.

But it should be fun making money.

Going again, back to what Jason was saying about sales and marketing.

Sounds more fun.

Yeah, it does.

But why aren't we finding making money fun and that, that's when it comes to the numbers, isn't it?

We understand our numbers and we're making money.

Surely that's the fun aspect of running a business.

Yeah, I think that's, that's an excellent point.

I really like that idea of like the reverse Parkinson's law idea that sort of sits within that as well.

But I think, you know, this, this element of fun and the process and the practicality of it, I mean, both as individuals with my own clients, I've seen it historically.

I see it as new clients get onboarded.

I see it through the other profit first professionals and the work that we do with them and these client circumstances, you know, we had one recently, a business that was just flying past that million revenue barrier and was making no more money than it did when it was at half a million.

It's like, what on earth is happening there?

And actually, to Deb's point, it's just like, oh, the money's just going out.

I'm just doing more.

Okay, I'll just keep doing more then.

And we'll now get to A million and a half in revenue and we're still not making any more money than we did when we were half a million.

It's like, my word, life is hard enough without actually trying to run a million and a half turnover business with all of these moving parts and not getting any more out of it.

And that just comes back to that.

It's a structural problem, it's an educational problem.

There are all sorts of aspects to that for me.

But ultimately, I think, you know, that Parkinson's Law idea, we have to start working out how we make room for ourselves a larger part of that puzzle.

You know, I think I often used to take my son off to swimming.

We used to go past the train station, 5 o', clock, and you see all the people pouring out from the train station thinking, oh, my word, what a grind.

And yet you get this opportunity to be the leader in a business and then think, my word, there's all these other people that I'm providing for.

And yet actually, I'm not really, actually having that much fun here.

It's really quite hard work.

Running a business is.

It is a serious business running a business.

But I think we also need to recognize there is nothing wrong with this earning from our business as well, and that should be a priority for us.

Surely the happier and more motivated we feel for a lot of people, that will come down to a monetary thing or, or what that gives them in other ways.

You know, we should want to go back to work.

We should want to feel incentivized to go back to work, to do more and better and serve at a greater level in whatever area we're working in.

That.

That should be a fun part of the process.

So, yeah, I thought that was a really interesting way to sort of reverse engineer the Parkinson's orbit, to be fair.

Yeah, it was great.

Great.

Both great answers.

And I, I think as well, the, the reason that business owners don't look at their money or put their money last is because they know it's not going great.

So they kind of bury their head in the sand.

They kind of avoid looking because, yeah, I'm not sure it's not going great.

I've got people to pay.

I didn't really want to have a look.

Oh, I'll worry about it tomorrow.

And it.

And it just gets pushed back and pushed back and pushed back, push back.

And it's kind of the worst thing you can do in many ways.

And, and operating a business from one bank account is one of the biggest problems that causes this isn't it because there's no clarity on the money.

You know, there's money coming in, going out, it's going out here, it's going out there, there's direct debits coming out, there's payments to be made, there's salaries to be made, there's VAT bills coming up and there's just no other.

And this club, this customer's paid and this one hasn't.

There's no, there's no sense from it, there's no clarity, there's no clear picture about what's happening.

And so if your bank account is in chaos, more than likely your finances and your business is going to be in chaos because as you've both said, the money has to come first, otherwise what's the point of a business?

The business has to have money to, to be sustainable, to be long term sustainable.

And so that if you've got employers, you can look after them.

You know, if you've got customers, you can continue to look after them.

If you've got people that you're, you're buying or outsourcing to, you can still look after them as well.

There's an element of responsibility when you run a business that we don't realize when we take it on.

So with profit first, obviously what we do is we say we're going to have a different pot for profit, we're going to have a different pot for our owners pay, we're going to have a different pot for tax, and then we're going to have a different current account for our operating expenses.

So therefore the money comes into our income account, which is the normal bank account our customers pay us and then at regular intervals.

So depending on how often the money comes in, the best guidance is to do this on a weekly basis, so same time, same day each week and we can share what works for us and why.

In a minute we're then going to say, okay, so this is the income I've had into my income account this week.

So for me it's going to be a 9 o' clock on a Friday.

So 9 o' clock on a Friday, I look at the money that's come in since the 9 o' clock on the Friday, the week before.

And I say, right, this money's come in now what percentages?

Okay, here's my percentages and we'll talk about how I work out percentages later.

I'm going to put this percent of that money into my profit pot.

This percent of that money is going into my owner's pay.

This percent is going into my tax pot and the remaining amount's going into my operating expenses and that's what I've got to run my business on.

Now that is the basic, simple principle of how profit first works from a cash management strategy.

There's so much more, so much advanced techniques.

The point of this is what we've now done is we've reduced the amount of money going into our operating expense account and we've got less money to run our business on.

Now, this takes a lot of skill to start this off and understanding how fast you can go, how much you can reduce, etc.

That's the art of a profit first professional.

Again, we'll talk about that later.

But this is where Parkinson's Law comes in.

With Parkinson's Law, we've got a strategy, basically, or a belief that if you've got something available, you will consume it.

That's the basic concept of Parkinson's Law.

So if you've got a deadline of a project that you have to complete for a customer or for your boss, you know, if you work for someone and say that deadline is 31st December, more than likely you will take to 31st December to complete and to put that in front of the person you're providing it for.

If the deadline was the 15th of November, you'll probably complete it by the 15th of November.

It's that simple.

You will use the time up to consume and to complete what you need to complete.

The same equation comes down to money.

If you've got, I don't know, £10,000 in your bank account each month, you will consume that amount of money the same as same as people do when they're paid a salary.

They'll get their salary each month and they will use that money up and get to towards the end of the month and think, oh, well, when's payday?

When's payday?

I need payday to come, I've used up all my money.

And when you get a pay rise, you will still use up all your money and still be waiting for payday to come.

Because that's the natural Parkinson's Law, you will consume everything that's there.

So with profit first, by having money in your income account, moving some into profit, some into owners, pay some into tax, the rest into your operating expenses, you've actually flipped the formula, you've reduced the amount of money in your operating expenses, and guess what, you'll still be able to run your business on that amount of money because there are going to be Things that you're paying for that you don't use, that you don't need, that you could reduce or you could renegotiate.

There will definitely be things.

I think everybody who's worked with the business as a Profit First Professional has always found savings on someone's expense account.

And I think Mike, I think it was Mike that actually said not so long ago that the general rule of thumb is in the first quarter you can find 10% saving on operating expenses.

I'm pretty certain I've got that right.

That seems to ring about that's a big percent a saving on costs in your business.

So that's my way of explaining it.

A bit of a longer version, but it's my way of explaining how it works.

And obviously I've learned that from, from, you know, from Mike, but also from conversations around these things with all of you and with our fellow Profit first professionals.

So once, once we start making the allocations, for me, like I said, nine o' clock Fridays, always, never changed.

Always nine o' clock on a Friday.

That's my time.

That's when I look, go, open up my banking app, do my allocations.

Boom, job done.

Five, 10 minutes.

Not even five, five minutes, to be honest.

It takes seconds, let's be honest these days.

How about you?

So, Jason, I know you've got a different reason for the time and day that you would do your allocations.

Yeah, I'm a fan of Monday mornings, first thing on a Monday morning.

And that's only from the idea of thinking, okay, Monday to Friday, what did I pick up in that working week, that traditional working week kind of idea, what came in.

But the piece that I really like about it is the psychological benefit to the business owner.

How about paying yourself first thing on a Monday morning before you've actually done any work, but you know, you've been paid for the week already.

It's like, I kind of think that should be a nice feeling.

So going back to what Deb was saying that to me, it's like, that should be an element of fun for people.

It's Monday morning.

Most people, you know, there is that kind of traditional feeling about, oh, it's Monday morning, I don't fancy going to work Sunday evening kind of feeling.

It's like, how about going to work Monday morning knowing the first job is to pay yourself?

I.

That sounds like a pretty good thing to me.

So, yeah, so I'm a fan of Monday mornings for that reason.

Yeah.

A little bit more behavioral, psychological, perhaps within that than the pure mechanics of doing it for me.

But, yeah, I, I kind of like that idea.

Yeah, without doubt, without that.

I love that thinking as well.

It's, it's a slight flip on my thought process because mine is.

I'm rewarding myself at the end of the week in my mind, because I'm filling up my pots and it makes me feel good.

But I love the, the idea of actually being even more proactive and saying, why not do it and start the week off in that way?

So I do love, I do love your thought behind it.

I just can't break my habits.

I'm so used to it.

It's ingrained in me in, in what I do now.

How about you, Deb?

Is there a particular day and time you've always gone for?

Yeah, well, it's changed because I don't have the bookkeeping and accountancy anymore.

And now my income comes in once a month.

So on the first, so on the first day each month, that's when I do it.

Yeah, and there we go.

And that's.

So that, that's a really important point because there will be that, certainly accountants and bookkeepers that perhaps have all of their clients paying them through direct debit, standing orders, direct debits, and they might all come through at the same time of the month and they might not have any other money coming in.

So again, you would do monthly allocations in that scenario.

But of course, in the book, Mike talks about the 10th and 25th of each month.

So here, here's the, here's the beyond the book scenario, isn't it?

Straight away, we don't do that over here.

That doesn't really serve a purpose, particularly in the uk.

I don't feel it kind of goes back to the traditional check runs, I believe is, is where Mike was coming from with that scenario.

You know, let's be honest, the book was written 10, 11 years ago now, maybe a little bit longer.

And so it's, it's probably a little bit of a throwback to that.

Plus, American banking is slightly behind the UK banking world.

And with the, with banks like Stalin and, you know, a Monza and metal and Alec banks, another one that's.

It's up and coming now where we can have pots and move, move money into pots on the.

With ease.

You can really build that habit of what works for you.

So the point of being consistent and doing it at the same time, same day, either every week or every month, depending on how your income comes into your business, is to create that habit, but also to understand the Rhythm of the money coming in and out of your business.

So you can see where there's peaks and troughs.

You know, where is the times when I'm going to need money in my operating expenses because I've got some bills coming out.

A lot of people, Jason, will potentially have a separate pot for salaries because it's high on their agenda to make sure.

Of course.

And you'd expect anyone who runs a business to feel like this.

It's really important to me to pay my team on time every month.

So there's an opportunity there, isn't there?

With a separate.

Potentially, yeah.

And definitely, I mean, for me, it's something I use a lot with clients who fall into one of maybe four categories.

They either have a payroll to pay.

It's not just them in the business.

So you never want to miss paying your people.

Second one is for people who have premises, you never want to miss the rent payment.

And then I kind of get into people who run marketing budgets and have regular marketing spend and also people who run vehicles in the business.

So they typically tend to be four subsets that I, that I will use on a fairly regular basis with clients dependent on the nature of the business and the, and the structure and so on.

But again, you know, it's, it's a beyond the book technique.

It works just fine in opex, provided you, you know, you, you've got your sums right in there and everything gets covered off.

But again, I think it comes back to this idea.

The greater the level of clarity we have about the moving parts in a business.

And at the end of the day, salaries is probably always going to be top cost.

Premises will be in there.

Vehicles cost money to run.

Marketing budgets cost money to run.

It gives people greater definition around those areas.

So you can get far more strategic about that next vehicle.

Increasing marketing spend, taking on the next team member.

We just get better clarity around those areas.

The other thing that I, that I like about the separation piece there is it helps me focus on how much stuff is actually having money spent on it in the rest of the business.

You know, how much is, you know, traditional business.

Let's think about it, you know, stationary, you know, how much gets spent on stationery every month, you know, and all the, like, the peripheral bits and bobs that people think we need to run a business, you know, how much goes on phone bills and so on.

So I think for me, going back to your comment about that 10% piece, you know, and finding 10% within a quarter and so on, for me, that just Gives a little bit more clarity around that as well.

You know, where are the significant and material amounts of money being spent as opposed to what does the day to day running cost of the business look like underneath all of those major categories?

Where are there opportunities to tighten up on some of those things?

Let's face it, the less money we spend on stationery, going back to the fun side of life maybe means we could spend more on marketing.

So, you know, it's like there are all these exchanges going on.

So for me, I like to see that what does it really cost day to day to run the business as well?

And taking those other larger items out gives a little bit more focus on that for me when I'm going through that exercise with clients.

For sure.

Yeah, I love that.

And that there's so lots of people slightly changing the, the topic.

There's lots of people that read the book, I think 1.4, over 1.4 million people have read profit first now.

So there's still a lot of people still to read it, let's be honest.

But that's A lot of people have read the book, have tried to properly think about the concept and how it could help them with their business.

What's, what's the, what's the biggest mistakes that, that you know of that people make by trying to implement Profit first on their own?

I'm kind of.

I'll put you on the spot for this one, Deb, if that's all right.

What's the biggest mistakes?

I would say getting there.

Instant reception.

Start with also it's a set and forget system.

So they'll think that they'll do their instant assessment and those percentages will carry them for the next six quarters and they absolutely will not.

Because businesses don't stay static.

So that's not monitoring.

Not monitoring because you might have a delayed payment going out, you might have a delayed payment coming in.

So yeah, this, that's generally not getting the percentages right is I would say the main mistake that I see people coming to us that's tried to self.

Tried to self implement.

Yeah, agreed.

I agree on that wholeheartedly.

Jason, if you've got another, another one perhaps.

No, but I think maybe an extension.

I think I would think about this as too much too soon.

So as much as getting that initial assessment wrong, diving into and thinking that the target level of percentages are the right ones to take in a business which is already up and running, I think as a startup, as you get going, no harm in trying to fit the business into Those target percentages from day one.

That's a very different proposition to having a business that's up and running, been trading for a while and then trying to go straight in with target percentages rarely, rarely works.

And you know, it takes work to get to those target percentages.

They relate to the fiscally elite businesses that have been analyzed to give us those target levels.

Most businesses are not fiscally elite.

So you know, there is just like an implication that says we are where we are and we need to move towards that level.

So yes, I think diving in at target levels would be the extension really of what you've both said, really in a slightly different way.

I mean, to be fair, I would also say I've seen some pretty horrendous looking percentages in that initial assessment.

You know, we did one with a, with a member recently.

You know, 90 plus percent going into OPEX, definitely not paying themselves very much at all, no provision for tax.

It's like, it looks pretty grim on the face of it, but the view that I always take is that doesn't matter what those initial percentage are, doesn't matter.

It matters that we know what they are because that's the point that we can start moving forward towards those target percentages from.

So as much as it's, you know, it can be scary, difficult experience for people to, you know, just going back to what you said, Tim, you know, face up to the fact that maybe the business isn't quite performing the way they hoped.

They've got that feeling, something isn't quite wrong.

I don't really seem to be able to do as much for myself as I think I should be able to.

You know, it's not uncommon to find people with some pretty ugly percentages in the beginning.

But that should always for me be taken as the starting point.

It's just a moment in time, we can move forward from there.

And that's very much, you know, the skill and application of the profit first professional network, you know, understanding which levers to pull how to move these things forward over time.

But I think the other important aspect of that is that it is a progression.

You know, this idea of the target percentages.

It's not like, oh, I'm here today at the end of the quarter, I'll be there.

It's like this quite often is, you know, months, quarters, years of work to make these things happen.

And that shouldn't put people off and dismiss it as a system.

It should make people think, I wonder what happens if I get another 1% into my owner's pay.

What does 5% do?

I mean, this, this assessment we did the other week, OpEx, I mean, you mentioned that 10% reduction.

The first part of the rollout plan that we looked at took this business from, I think it was like 89 to 84% as the expectation of what we could do with that OPEX percentage in that first quarter that was worth £26,000 to that business.

5%.

£26,000, yes.

It's relative mill and a half turnover.

Fine.

It's not like that if you're trading at 50,000 a year for sure.

But it just goes to show the power of these small percentages and moving towards makes way more difference than people actually perceive until they start seeing it for themselves.

So I think that's a really important point as well.

You know, this idea, we never want to go backwards in percentages, we want to build up steadily, so we're always heading in that direction and not having to retrace steps along the way as well.

I think it's so important.

The point you've both brought up is because with anything, if you get your starting point wrong, your journey is always going to go wrong, whereas it's so important to be starting in the right place and to understand how you move forward from that position onwards.

You know, we've all done profit assessments for ourselves initially and ongoing, but when we first started as Profit First Professionals, we've also seen our members profit assessments, we've also seen our customers, business owners, profit assessments.

And yeah, there's been some that are quite difficult to look at, but it's never a situation where you're like, yeah, I can't help you because we can help you.

Profit first helps everybody.

No matter what position your business may be in, you may feel like you're, everything's going beautifully well, you may be paying yourself enough money, I bet you you could do more.

I bet you you could earn more, or you could use money for a different purpose that serves you, serves your dreams, serves your outcomes.

And there could be other people that are in, in debt, perhaps, so that this is a reason why people think they can't start with profit first because they're in debt.

If you're in debt, you need to implement profit in your business so you can start to clear the debt.

You're not going to clear the debt by carrying on what you're doing, because it's clearly not worked so far.

You know, the definition of madness is to keep doing the same thing and achieving the same result, which is not the result you want, isn't it?

So profit first gives you that opportunity to actually change the situation you're in currently for the better.

But it doesn't happen overnight.

It's not a quick fix.

It's not something that's going to suddenly take you from, from where you're at right now with potentially, you know, working that month to month situation stressed out, you're not suddenly going to become mega rich.

You know, there's no promise of that because this is a real life situation that actually helps you change the behavior and how you handle the money in your business on an ongoing basis.

It's a way of guiding you to think differently, to create the new habit, to move the money into these different parts, to make sure that money is set aside so you can pay yourself a little bit more.

And then the next quarter you're going to pay yourself a little bit more again, then the next quarter a little bit more again.

And we gradually move you to this position where you're paying yourself everything you need to pay yourself.

Then we start to move you towards paying yourself to achieve the dreams and the desires that you wanted when you set out to, you know, set out with your business.

So it's just, just important to kind of explain about that and explain that the starting point is always the most important part.

And the best way to get your starting point right with profit first is with the support of a profit first professional.

Without doubt, if you're an accountant or a bookkeeper, you're going to need the support of a profit first professional.

And the best way to do that is to become a profit first professional yourself.

And then we are your profit first professional.

We guide you through the process.

And we've been doing this for a number of years now.

There's nothing we haven't seen.

There's no challenge we haven't overcome collectively between us all.

And profit first is certainly the answer to everybody's problems when it comes to a financial issue.

As long as you can bring the revenue into the business, you will be able to adopt the profit first principles and create a business that is much highly profitable than what it is now, that pays you and rewards you on a regular basis, helps you put the tax aside, and then helps you run a business that is long term sustainable.

So I think I've captured everything there.

Is there anything else that we need to talk about that we haven't spoke about yet that you can think of?

I'll go to Jason first.

Yeah, one thing that springs to mind is we've just Spent a bit of time talking about some profit assessments that look pretty dire on the face of it.

And they are just a starting position.

We can move forward from there.

One of the things that I think I've heard over time is the idea.

It is a system to basically rescue businesses over whatever period of time that might be.

It can help amplify and accelerate the growth of businesses that are already doing okay as well.

And that I think is a really important aspect of it.

It is not just there to help struggling businesses.

Yep, it's a great tool for that.

But actually businesses who are doing well and want to do more.

Our ability to look at those percentages across those various elements and work out where money is really required and where it could be better used can help businesses accelerate their growth, but not only accelerate their growth, do it safely and sustainably.

Can I afford the next person?

Can I afford the next vehicle?

As we look forward with these people, actually giving them confidence to go through that expansion recycle in a business, you know, as opposed to the.

Well, I hope the person works out and let's hope this is a good one and you know, let's hope we get enough to do more deliveries or whatever it might be within that, you know, this is structure and strategy playing out in businesses that are already doing well.

Why should they not be hitting those target levels and moving towards that, you know, getting a greater return out of their resources, you know, be it in house, labor, subcontractors, whatever the combinations of these things are.

So, yes, definitely there are two facets to it.

Yes, it can absolutely help businesses who are struggling or whether business owners owner doesn't feel they're getting just reward for the effort that's going in, but also as a means to accelerate growth in businesses as well that are doing okay.

Yeah.

Fantastic.

And Deb, is there anything else that you haven't added in yet?

Just think that it for business owners, yes, it gives them clarity and it gives them a path to follow, but it also teaches them how to make decisions and how their money is working within their business.

So it ultimately gives them autonomy.

They don't have to contact their accountant, which is what happened with us.

Our client didn't have to contact us to find out if they could afford to buy a new van or to develop a new website, whatever it was that they.

Because they'd already plan for it and they already had the money sitting there ready for their future plans.

So it gives them the confidence to make their own decisions rather than fretting and.

And looking at the bank and just their head in hands, they're not sure if they've got enough to cover everything.

Yeah.

So I think, and the only regret, I think I've come across people not implementing it sooner before.

So it would have saved them a lot of heartache, I think.

Great point.

It is a great point.

So here's the question, and I know the answer and you can both shout it out if you want to.

When's the best time to implement profit first?

Yesterday.

Yesterday closely followed by today.

I was expecting now, but yesterday is absolutely right.

Yeah, it's, it's.

And the thing is, if you're starting a business, the answer is still now implement it from the word.

In fact, you've got such a great opportunity if you're starting a business up now because you can just start to put percentages into those pots straight away.

This has been really, really great talking to you both about profit first.

Jason, you look like you've got something to add, so I'm going to just let you speak before I go into the next bit.

No game face, that's for sure.

Okay, so the one thing I was just going to say, you mentioned debt not so long ago in this conversation.

And I think one of the issues that people have with debt is let's think about it in bounce back loan, okay, There's a standard amount going out every month.

Fine, I can get that.

But how do you deal with credit card bills that are just mounting up in the background?

Loans on which we've taken further loans as a business has grown and we take another one, how do we actually deal with that?

And I think that one of the issues that crops up is a lot of it is about not having the clarity to understand how to deal with it, nor a consistent approach.

And that again, I think plays a huge part in that debt story.

And people look at numbers and think, oh my word, it's going to take me forever to clear that out.

But actually, structured approach, bit of vision, bit of forward thinking and some consistency, can clear some pretty significant amounts in not much time.

I mean, I've had a client, I started with them.

They were combination of debts, personal business, about 30 grand, 150 grand turnover.

We had it done in three years.

It's like it's not one difficult when you have a plan and everybody understands exactly what the plan is and we're keeping up with the plan.

And we did some extra things that you won't read about in the book to help us do that from a systematic point of view.

But that was also understanding how much free money there was in the business that could additionally be applied to that debt reduction that they couldn't see for themselves beforehand.

So I, I think that some of these things, you know, the problems that people see as being potentially insurmountable or the reasons to not start actually should be exactly the reason to take it head on and say there are techniques out there that can help me deal with this.

Yes, accountability plays a huge part of that from a profit first professionals role in the, in that discussion.

But I think a lot of the things that people come to from a position of this is just too hard or, you know, I'm embarrassed about these figures, whatever it is, trust me, we have seen some pretty rubbish average percentages as a group of people.

And it is a position that can be resolved.

But the reality is if you can't see which way you're facing, how can you possibly set off in the right direction?

So there is this element, I think that, yeah, people carry a lot of fear and trepidation around money as a whole, as a system.

It is transparent.

Deb mentioned, you know, that ability to look at bank balances from time to time.

The ability to make decisions in real time comes as part of the process.

You don't get that from a balance sheet and a profit and loss account.

Weeks, months, goodness knows how long out of date.

Being able to make real life decisions that matter in your business today because you have clarity about what you can see is total transformation for business owners.

I mean, imagine that understanding.

Can I afford to make the high?

Yes, I can.

I've got a wages pot that tells me I've got the money to do it.

Total transformation in thinking.

Get on, you know, go serve your customers now.

Don't sit there fretting all day wondering about it on a spreadsheet, you know, trying to spreadsheet the life out.

The problem that you don't really understand anyway.

Bank balance on a phone allocated for the purpose, off you go, make the decision.

Incredibly powerful stuff.

Absolutely.

Yeah.

And it's so true, is so true.

There's lots of reasons why people don't think they can start profit first, but actually they can and that then they need to, they need to start it now.

You know, I'm not profitable, so I can't do profit first.

That's exactly why you need to do profit first so you will become profitable.

But we hear these, we hear these resistances or these excuses for not starting something because people find it difficult, difficult to change, to adapt a new habit A new.

A new way of behaving.

But like you said, you said the key word accountability from a.

Accountability from a Profit First Professional.

I also want you, you know, I was going to wrap up, but you've kind of got me going again now.

I also want to kind of highlight that if you've read the book, you've got an idea of the basic principles.

If you were to talk to an accountant or bookkeeper who have also just read the book, they're only going to have the same knowledge as you.

If you really are serious about implementing Profit first in your business, you really need to be talking to certified Profit First Professional because we have seen it and done it and lived it and breathed it and we are guiding our members all the way through.

Now, that's not necessarily us three that you need to be talking about to, but you need to talk to members in our community because we've taken them through the process of implementing Profit first in their business.

We've helped them work with clients and they're building up tremendous experience and knowledge and they've worked with all these different businesses already on how to implement Profit first successfully.

And so they learn all of these things from our experience that you just don't get from the book.

So if you're serious about Profit first first and you're a business owner and you want support, you can feel free to reach out to us.

In fact, if you go to our website, which is profit first uk.co.uk we have got a section that says find a certified PFP and you will actually be able to fill out a form either come into our inboxes and we will be able to match you up with the right Profit first professional for you.

So, you know, when we talk about investing in yourself and in your business, if you're serious about Profit first, work with a certified Profit first professional that may be an accountant, a bookkeeper or a coach.

So it depends on what you're looking for.

But I can highly recommend you reach out to someone because that's where the support, that's where the success will come from.

And also if there are accountants or bookkeepers listening to this and you are offering Profit first as a service to your clients, you need to stop.

If you're not a certified Profit first professional because you're not licensed and I'm afraid to tell you, you're probably not doing it in the correct way, come and talk to us.

We would love to have you in our world.

The first place for you to go to.

And this, this is Open to anyone who's an accountant, bookkeeper or coach that's interested in Profit First.

Interested in learning more about Profit First.

Myself, Deb and Jason, the three of us, we run group, a free community called the Profit First Pathway.

You can find us on Facebook.

So go onto Facebook, type in the Profit First Pathway, you'll see our three smiling faces on the green and blue graphic and you'll just have to click that you want to join.

Three simple questions.

Agree to the rules and you'll be accepted in.

And then you'll have access to us on a regular basis.

We'll be able to talk to you.

We'll share more details about Profitability first, how it works.

We'll share more details about what being a Profit First Professional is at this point.

Joining the Profit First Pathway, there's no commitment.

It's a pre membership group and we would welcome you to come and join us, have conversations with us and find out more.

And we'll help you with your own Profit first journey as well.

Because the key part about Profit first is if you want to share it with someone else, you have to live and breathe it in your own business, otherwise it's impossible for it to be successful.

And for you to be successful in your own business, you need the support of a Profit First Professional.

So it's a, it's a circle, but it works.

We've seen tremendous success in businesses all around the world.

We've seen tremendous success of businesses in the UK and Ireland and we've seen tremendous success from our members as well with their business because they're supporting their members, us.

So, so, well, so thank you very much for joining us.

Any, any last words, Deb?

Any last words from you?

If you're not doing Profit first, why not?

You know, you've got to try, you've got to investigate it because you're giving yourself unnecessary heartache by not.

By not looking into it.

Thank you, Deb.

Jason, last words?

Yeah, I think transformation in a business is, is possible and it's not as difficult as people think.

I often use the idea, you know, most business owners have a goal, what they don't have is a plan.

I've always gone with the process that Profit first is going to give me the plan to help the business owner achieve their goal.

So I think that these are things, it sort of comes back to the accountability piece to a certain degree, but actually defining what that looks like for someone.

We will have different things that we want to do in life and different priorities for sure.

But once we get a handle on what that actually looks like.

We can build a plan to do that.

It's not a random set of events anymore.

It actually provides that structured pathway to move towards those things that we want to do in life.

So, yeah, if you got goals but you don't have a plan, back to that website link.

Fantastic.

Thanks very much, both of you.

We'll see you all next time.

Thank you for joining us on our podcast today.

Profit first beyond the Book was brought to you by the Profit First Professionals UK and Ireland team.

If you'd like to find out more about Profit first or becoming a Profit First Professional, head to our website, profitfirstuk.co uk.