In this episode, I’m talking about one of the biggest misunderstandings I see in business — the belief that profit is something that happens after you’ve worked hard enough.

For many business owners, profit is treated like a leftover. Something that might appear at the end of the year if there’s anything left in the bank. And that way of thinking is exactly why so many capable, hard-working people feel constant financial pressure.

I explain why the traditional formula — sales minus expenses equals profit — quietly encourages overspending and keeps businesses stuck in a cycle of stress. When expenses are allowed to grow without clear boundaries, profit never gets the chance to take priority.

In this episode, I share why profit needs to be a design decision, not a reward for effort, and how putting simple constraints in place changes the way a business behaves. When spending has limits, decisions become clearer, cashflow improves, and the business starts to support your life — not drain it.

If you want to stop working harder for the same results and start building a financially healthy business by design, this episode will shift how you think about profit from the ground up.

Takeaways:

1. Profit is not merely a reward for hard work; it is fundamentally a design decision made in advance.
2. The traditional formula of sales minus expenses equals profit perpetuates detrimental spending habits within businesses.
3. Financially healthy businesses prioritize profit and operate within defined financial boundaries to ensure sustainability.
4. The psychological aspect of finance reveals that humans manage visible funds rather than abstract concepts like profits or taxes.
5. Intentional profit allocation transforms a business's approach to spending, ensuring long-term financial health and resilience.
6. Recognizing the need for structural changes in business design can lead to improved financial outcomes and reduced stress.

Links referenced in this episode:

1. debhalladay.co.uk

Companies mentioned in this episode:

1. Accounts Ladies
2. Accounts Office

Welcome to Profit first with Deb Halliday.

That's me.

I'm Deb.

I'm a Profit first professional and trainer, author of how to Build a Financially Healthy Business, founder of the Accounts Ladies, an award winning accountancy practice, and the Accounts Office training Academy.

This is the show for business owners who want to stop stressing over money, keep more cash, pay themselves more, and build a business that truly thrives.

Just a quick note, Profit first is a licensed methodology.

Everything here is designed to help you implement it in your own business.

If you're interested in helping others with Profit First, I'll share how you can apply to become certified too.

Let's get started.

Because your business should work for you, not the other way around.

Hello and welcome back.

Today I want to talk about something that sounds simple on the surface, but quietly underpins almost every financial struggle I I see in small businesses.

And that is this idea that profit is something you earn at the end.

That if you just work hard enough, if you just grow a bit more, if you just get through this next quarter or this next tax bill, then profit will show up.

For most business owners, that moment never arrives.

Not because they aren't capable, not because they aren't trying, but because the business has been designed around the wrong assumption from day one.

The default formula.

What most people inherit.

Most businesses are run on a formula that no one ever formally agrees to.

Sales minus expenses equals profit, whatever happens to be left.

That formula isn't neutral, it's behavioral.

It assumes expenses are allowed to expand freely.

Profit is optional.

The owner absorbs the risk.

And the problem isn't the maths.

The problem is what this formula encourages.

Because when profit is treated as an afterthought, spending becomes the priority by default.

There is always something else the business needs.

There is always another cost justified in the name of growth.

There is always one more thing to invest in.

And gradually, often without realizing it, the business owner becomes the buffer.

They wait, they defer pay, they borrow from themselves.

They hope next month will be better.

Why?

This isn't a discipline issue now.

This is where many business owners blame themselves.

They tell themselves they're not disciplined enough, that they should have more willpower, that they should be better with money.

But this isn't a personal failing.

It's a design failure.

Because humans don't manage what's abstract.

We manage what's visible.

If all the money is sitting in one account, your brain treats it as available, even when it isn't.

Tax feels theoretical.

Profit feels imaginary.

Future obligations feel distant.

So spending Decisions are made based on what looks possible right now.

That's not weakness, that's psychology.

Profit as a design decision this is why I say profit is not a reward, it's a design decision.

When you decide, deliberately and in advance, that a portion of revenue is not available for spending, everything else has to reorganize.

Costs get questioned, priorities sharpen, trade offs become visible.

The business starts operating within boundaries.

And boundaries don't restrict good businesses, they reveal them.

A business that only works when spending is unlimited, isn't sustainable, is fragile.

A financially healthy business is one that works within constraints.

Why?

This feels uncomfortable at first.

Now I want to be honest about something.

When business owners first hear this, there's often resistance because it feels risky.

What if I need that money?

What if something goes wrong?

What if I can't cut costs fast enough?

And that discomfort is important.

It tells us where the real issue is.

If your business can't tolerate even a small boundary around spending, then the problem isn't profit, it's structure.

Profit exposes weaknesses, it doesn't create them.

The role of behaviour in FINANCE Traditional finance education assumes rational behaviour.

But business owners aren't spreadsheets, they're humans.

If we respond to what's in front of us, we react under pressure, we avoid discomfort.

So the smartest systems don't rely on perfection.

They reduce decision making at the point of stress.

They make the right behaviour easier than the wrong one.

That's why separating money by purpose works.

Not because it's clever, but because it removes ambiguity.

What financially healthy businesses do differently?

Financially healthy businesses don't ask, how much can we afford to spend?

They ask, how much are we allowed to spend?

That single shift changes everything.

Because now profit is protected, owner's pay is intentional, tax is planned for, expenses are forced to adapt.

And adaptation is where improvement happens.

Ordinary months first good months here's another important distinction.

Most struggling businesses are built to survive on good months.

They rely on one strong quarter, one big client, one successful launch.

But financially healthy businesses are designed to work on ordinary months.

They don't depend on heroics, they don't rely on stress.

They don't require constant hustle to feel safe.

And that's not about ambition.

It's about resilience.

What this means for you.

So if you're listening to this and recognizing yourself, I want you to hear this clearly.

You don't need to work harder.

You don't need another strategy.

You don't need more information.

You need a better design.

A design where profit is intentional, where spending has limits where the business supports your life, not consumes it.

Profit isn't something you earn for being good, it's something you decide matters.

And when you make that decision calmly and deliberately, the business begins to change even before the numbers do.

Because behavior follows design, and design is always a choice.

Thanks for tuning in to Profit first with me, Deb Halliday if you found today's episode helpful, please subscribe.

Like leave a review and share it with another business owner who needs to hear this.

For more resources, courses and to connect with me, head to debhalladay.co.uk and remember, when you put profit first, you build a business that reduces the stress while it supports your goals and dreams.

See you next time.

SA.