There is a huge psychological benefit to the profit first methodology – it is easy to see why if you are not a numbers nerd. I must admit us Accountants and bookkeepers think differently to the majority of people. You see we are constantly thinking numbers as they come naturally to us.
Equations and calculations of any king can be tough for non-number nerds to grasp and understand.
Many entrepreneurs are incredibly capable, creative, intelligent and hands on in their business but they really struggle with the accounts.
It is drilled into us that Profit comes at the end of the equation, for most people, a clear indication that is the end result of your efforts. It’s a visual cue, but no one makes it a priority because it comes last.
Profit if what is left over after everything else is done.
We naturally focus on the things that come first, which in the standard accounting equation is sales and then expenses. Naturally entrepreneurs believe that to increase profits they need to increase revenue.
Reducing expenses is something does not occur to many people as another way of increasing profits.
Well i’m here to tell you that a simple and powerful shift in mindset can change your focus to Profit first and that means expenses are the end result and come last.
This is where Profit First comes in, a simple and powerful shift in mindset and reframing Sales – Profit = Expenses means your focus is now on profit and expenses are the end result and what comes last.