BRX Pro Tip: Profit First
Stone Payton: Welcome back to Business RadioX Pro Tips. Stone Payton and Lee Kantor here with you. Lee, today’s topic, profit first.
Lee Kantor: Yeah. We’re big believers in the profit first philosophy. We’ve been doing it in our business for a long time. And I think it’s important to periodically go through what that means, and why it works, and why it works for us.
Lee Kantor: So, typically, a business, historically, I guess, they’ve run where they’re saying sales minus expenses is profit. Which means that anything left over is your profit. And that’s how most businesses operate and they’ve operated for a long time that way.
Lee Kantor: In our model or in the profit first model, we use the same kind of variables, but we just adjust the order of things. So, in our world, we prioritize paying ourselves first. So, it’s about anything left is the expenses. So then, you cut the expenses before you stop paying yourself, in other words. So, in our world we are taking profit first before expenses. And anything left over are the expenses.
Lee Kantor: So, we do the adjustment on the expenses side, not the profit side. So, once you’ve determined what the profit percentage you want to have in your business, now you just adjust your expenses so that that profit is there for you when you need it each month.
Lee Kantor: So, I think that by doing that in our business, at least I can speak for us, is that, we’re in business a lot longer and with a lot less stress because we know that there’s the amount of money coming in that we want to come in each month. So, I think it’s something for a lot of entrepreneurs to consider profit first, go by the book, check out the website, and learn how to implement it in your business.
