Taming the Beast: Mastering Profit First for Business Success
Are you tired of working hard in your business, only to find there’s never enough left over for you at the end of the month? In this episode, I’m introducing you to the transformative Profit First methodology—created by Mike Michalowicz—which flips the traditional way of managing business finances on its head.
I’m Deb Halliday, certified Profit First Professional, founder of the Accounts Ladies, and author of ‘How to Build a Financially Healthy Business’. I know firsthand how easy it is for business owners to fall into the “survival trap”—chasing sales, covering bills, and still feeling like you’re running on empty. Traditional accounting says profit comes last, but that’s exactly why so many of us end up with nothing left.
Profit First is all about putting profit first—literally. Instead of sales minus expenses equals profit, we switch it to sales minus profit equals expenses. This simple mindset shift can change everything, especially when you’re facing the challenges of VAT, corporation tax, and rising costs here in the UK.
In this episode, I’ll share real stories and practical insights to help you break free from the cycle of just getting by. We’ll explore why prioritising profit is the key to building a business that not only survives, but truly thrives. Plus, I’ll walk you through the first steps to making Profit First work for you—so you can finally start keeping more of what you earn.
Takeaways:
- Learn why the traditional approach to business finances keeps so many owners stuck—and how Profit First offers a way out.
- Understand the power of prioritising profit before expenses.
- Get practical, actionable steps you can take today to start building a more profitable business.
- Discover how Profit First can help you tackle the unique financial challenges of running a business in the UK.
Links mentioned:
financiallyhealthybusiness.co.uk
debhalladay.co.uk
Companies and resources featured:
Accounts Ladies, Accounts Office, Mike Michalowicz, HMRC, VAT
Transcript
Welcome to Profit first with Deb Halliday.
Speaker A:That's me.
Speaker A:I'm Deb.
Speaker A: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.
Speaker A: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.
Speaker A:Just a quick note.
Speaker A:Profit first is a licensed methodology.
Speaker A:Everything here is designed to help you implement it in your own business.
Speaker A:If you're interested in helping others with Profit First, I'll share how you can apply to become certified too.
Speaker A:Let's get started, because your business should work for you, not the other way around.
Speaker A:Hello and welcome to Profit first with Deb.
Speaker A:Mastering the core principles.
Speaker A:I'm Deb Halladay, a certified Profit first professional based here in the uk, and I'm passionate about helping you make your business permanently profitable.
Speaker A:Today we're kicking off with chapter one of Mike Michalowicz's Profit first called Taming the Beast.
Speaker A:If your business feels like a monster eating your cash, this episode is for you.
Speaker A:Let's tame that beast together.
Speaker A:Running a business in the UK can feel like a rollercoaster.
Speaker A:Maybe you're a plumber in Leeds, a boutique owner in Brighton or a tech consultant in Edinburgh.
Speaker A:You're working hard, chasing sales, but your bank accounts are always teetering on empty.
Speaker A:Sound familiar?
Speaker A:Mike Michalowicz calls this the monster of business.
Speaker A:A beast that grows bigger but never seems to leave you with profit.
Speaker A:In chapter one, he explains why this happens and how Profit first can change the game.
Speaker A:The problem starts with traditional accounting, what we call gaap, Generally Accepted accounting principles.
Speaker A:It says sales minus expenses equals profit.
Speaker A:But here's the rub.
Speaker A:Profit is always last, like scraps left after a feast.
Speaker A:For UK businesses, this is brutal.
Speaker A:You're juggling VAT returns, pay corporation tax and rising costs like rent or fuel.
Speaker A:By the time you pay everyone else, there's nothing left for you or your business's future.
Speaker A:Take Sarah, a new UK catering business owner.
Speaker A:Her turnover is 150,000 pounds a year.
Speaker A:She pays suppliers, staff and HMRC first.
Speaker A:Last year, her profit was 2,000 pounds, barely enough for a weekend away.
Speaker A:She's trapped in what Mike calls the survival trap.
Speaker A:When cash is low, she panics, chases any sale, like catering a low margin event, and takes on new expenses to support it.
Speaker A:The cycle repeats.
Speaker A:More sales, more costs.
Speaker A:No profit.
Speaker A:You might be thinking, but I need sales to survive.
Speaker A:Absolutely.
Speaker A:But sales without profit are like running on a treadmill.
Speaker A:You're exhausted but going nowhere.
Speaker A:Mike's wake up call came when he lost his fortune and saw his daughter's piggy bank.
Speaker A:It taught him save Profit first like a kid stashing pocket money.
Speaker A:That's the Profit first formula.
Speaker A:Sales minus profit equals expenses.
Speaker A:You take profit first, then run your business with what's left.
Speaker A:Why does this matter?
Speaker A:In the UK, our tax system is complex.
Speaker A:VAT at 20% corporation tax at minimum of 19% National Insurance contributions.
Speaker A:Without a system to manage cash, you're always one HMRC deadline away from stress.
Speaker A:Profit first tames the beast by making profit a habit, not a hope.
Speaker A:It's about facing your financials head on, no matter how scary.
Speaker A:In chapter one, Mike shares stories of entrepreneurs like a 15 million pound company owner with plastic lawn furniture showing even big businesses struggle without profit.
Speaker A:Focus.
Speaker A:Ready to tame your beast?
Speaker A:Here's your action step from Chapter one.
Speaker A:Draw a line in the sand.
Speaker A:Commit to running a profitable business today.
Speaker A:Then look at your bank statement and your profit and loss to find out what your actual profit is.
Speaker A:After all expenses.
Speaker A:If it's near zero, don't panic.
Speaker A:This series will guide you.
Speaker A:Next episode we'll dive into chapter two how Profit first works practically for UK businesses.
Speaker A:Subscribe now so you don't miss episode two.
Speaker A:Visit financiallyhealthybusiness.co.uk for free.
Speaker A:Profit first resources tailored for UK businesses.
Speaker A:Let's make Profit first together.
Speaker A:Thanks for tuning in to Profit first with me, Deb Halliday.
Speaker A:If you found today's episode helpful, please subscribe, leave a review and share it with another business owner who needs to hear this.
Speaker A: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.
Speaker A:See you next time.
Speaker B:Sam.
