Let’s say for the sake of argument that your profit margin is 15%. If you jump right in and immediately start setting aside 15% of your revenue using this method when you haven’t been allocating anything, you’re going to short-circuit your brain and it’s not going to work.
As I said at the start, this really is a mindset shift, and you are going to want to ease into it.
Jump right up to the full level of profit you’re aiming for, and you’re going to find it next to impossible to cut down your expenses quickly enough and you are going to quit before you even get started. Baby Steps!
Going too hard, too fast you run the risk of ‘borrowing’ money from your profits to cover the shortfall, which seems perfectly reasonable, but it’s actually stealing from yourself. We definitely don’t want to do this.
It completely defeats the purpose of the whole system.
So give yourself time to reduce your expenses, allowing you to take – and keep – the amount you set aside in Profit. If this means starting at 1% rather than 15% so be it.
Get in the habit of setting aside that 1% and leaving it alone, without borrowing from it for expenses. Get in the habit of managing with a little less, and spending a little less.
Once you’re used to it, bump it up to 2% and again, take time getting used to the habit.
Keep increasing it in increments and you’ll find it a lot easier to adapt to the change.
Baby steps win the race!