Transform Your Business: The Profit First Mindset Shift
Today, we’re diving into the game-changing concept of Profit First—a simple shift that can transform the way you run your business finances. Championing Mike Michalowicz’s proven methodology, I’ll show you why putting profit before expenses isn’t just smart accounting—it’s the key to building a business that truly supports you.
I’m Deb Halliday, Profit First Professional, author, and founder of The Accounts Ladies and The Accounts Office. In this episode, I’ll break down how the traditional “sales minus expenses equals profit” formula leaves so many business owners stressed and struggling. Instead, we’ll explore how flipping the formula—prioritising profit first—can help you create financial security, reduce cash flow stress, and build sustainability into your business from day one.
We’ll talk through the practical steps: setting up separate accounts for profit, tax, owner’s pay, and operating expenses, and how this approach makes cash flow management so much easier—especially with rising costs and ever-changing UK tax rules. You’ll hear real-life scenarios (think: a bakery in Bristol or a freelance designer in Manchester) to help you picture how Profit First can work for any business, no matter the size or sector.
By the end of this episode, you’ll be inspired to rethink your approach to money, take control of your finances, and start building a business that puts your wellbeing first—not just your bills.
Takeaways:
- Discover why putting profit first is the foundation of a financially healthy business
- Learn how allocating a percentage of revenue to profit, tax, and your own pay brings stability and peace of mind
- See how setting up separate bank accounts for each purpose can transform your cash flow
- Understand that Profit First isn’t just a system—it’s a mindset shift for business owners
Links mentioned:
debhalliday.co.uk
Companies and resources featured:
Profit First, Deb Halliday, Accounts Ladies, Accounts Office, Mike Michalowicz, HMRC
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, 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.
Speaker A:Because your business should work for you, not the other way around.
Speaker A:Hello and welcome to Profit first with Deb Halliday.
Speaker A:I'm Deb Halladay, or a certified Profit first professional here in the uk and I'm here to help you make your business permanently profitable.
Speaker A:Today we're diving into why Profit first is the mindset shift every business owner needs.
Speaker A:Let's get started.
Speaker A:If you're running a small business, maybe a cafe in Manchester, freelance design gig in London or an E commerce shop in Glasgow, you've probably felt the pinch of cash flow.
Speaker A:You're making sales, but where's the profit?
Speaker A:Too often we're taught to focus on revenue minus expenses equals profit.
Speaker A:But that old formula, sales minus expenses, leaves profit as an afterthought.
Speaker A:Mike Michalowicz's Profit first flips that on its head.
Speaker A:Sales minus profit equals expenses.
Speaker A:That's right, you take your profit First.
Speaker A:Why does this matter?
Speaker A:In the uk, with rising costs, VAT obligations and HMRC deadlines, cash flow is a nightmare for many.
Speaker A:Profit first uses human psychology.
Speaker A:Think of it like putting your savings in a separate account before you spend.
Speaker A:You set up bank accounts for profit, tax, operating expenses and your own pay.
Speaker A:Every time money comes in, you allocate a percentage to each.
Speaker A:It's simple but transformative.
Speaker A:For example, let's say you run a Bristol bakery.
Speaker A:Your monthly revenue is £20,000.
Speaker A:Instead of spending it all on ingredients, staff and rent, you allocate 5% to profit 1,000 tonnes, 20% to tax 4,000 tonnes, 15% to your salary, 3,000 pounds and.
Speaker A:And the rest to expenses.
Speaker A:Suddenly you're saving for vat, paying yourself consistently and building a profit cushion.
Speaker A:No more scrambling when HMRC comes knocking.
Speaker A:I hear you asking, but what if my business is barely breaking even?
Speaker A:Don't worry, we'll cover how to start small in the next episode.
Speaker A:For now, know this profit first works for any business, from freelancers to SMEs because it's about discipline, not size.
Speaker A:So why adopt Profit First?
Speaker A:It forces you to prioritise profit, pay yourself and plan for taxes.
Speaker A:Crucial in the uk with our complex tax system, it's not just accounting, it's a mindset.
Speaker A:Next time, we'll talk about setting up your Profit first system step by step.
Speaker A:Want to take the first step?
Speaker A:Check your business bank account today and see how much you're actually keeping as profit.
Speaker A:If it's zero, don't panic.
Speaker A:This series will help.
Speaker A:Subscribe now and I'll see you in the next episode.
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 debhalliday.com 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.
