Unlocking Financial Health: Implementing Profit First Today
Ready to make profit a habit from day one? In this episode, I’m guiding you through the essential steps to implementing Profit First, inspired by Chapter Five of the book. Whether you’re just starting out or looking to finally get your business finances working for you, this is your roadmap to sustainable profitability.
I’ll break down exactly how to set up your Profit First accounts—covering income, profit, owner’s pay, tax, and operating expenses—so you can allocate your funds with clarity and intention. We’ll talk about why consistency matters, how to establish a simple allocation rhythm, and the power of celebrating your profits every quarter.
You’ll hear real-life success stories from UK business owners who’ve transformed financial chaos into clarity and calm with Profit First. Plus, I’ll share practical tips for working with your accountant, getting past any scepticism, and making the system work for your unique business—whether you’re a manufacturer in Sheffield or a freelancer in Cornwall.
This episode is all about taking control, finding efficiencies, and building a business that supports your goals (not the other way around). I’ll finish up with clear, actionable steps so you can get started today—setting up your accounts, reviewing expenses, and shifting your focus to profit.
Takeaways:
- Learn how to set up and use Profit First accounts for better cash flow and less stress.
- Discover the importance of consistent, quarterly profit celebrations.
- Find out how reviewing expenses can boost your bottom line.
- Get practical advice for working with your accountant and making Profit First your own.
- Start transforming your financial habits with simple, actionable steps.
Links mentioned:
financiallyhealthybusiness.co.uk
debhalladay.co.uk
Companies and resources featured:
Accounts Ladies, Accounts Office Training Academy, Starling, Monzo
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, 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 Halliday, your UK Profit first professional.
Speaker A:And today we're covering Chapter five of Profit First.
Speaker A:Day one quarter, one year, one and forever.
Speaker A:This episode is your roadmap to start Profit first today and make it a lifelong habit.
Speaker A:Let's dive in.
Speaker A:Chapter five is where Profit first comes alive.
Speaker A:Mike Michalowicz lays out a clear plan to implement the system, starting small and building momentum.
Speaker A:Whether you're a Sheffield manufacturer or a Cornwall freelancer, this works.
Speaker A:The key is action.
Speaker A:Set up accounts, allocate funds and celebrate profits quarterly.
Speaker A:Let's break it down for UK businesses Day one.
Speaker A:You don't have to, but you can tell your accountant you're using Profit First.
Speaker A:They might raise an eyebrow.
Speaker A:Some UK accountants think it's unorthodox, but it's just a cash flow system, not a replacement for bookkeeping.
Speaker A:Set up your accounts.
Speaker A:Income Profit Owner's Pay tax and operating expenses.
Speaker A:Use a UK bank like Starling or Monzo.
Speaker A:Label accounts clearly like profit 5% or tax 20%.
Speaker A:Deposit all income into the income account.
Speaker A:Then allocate according to your caps current allocational percentages that you worked out from your instant assessment.
Speaker A:For example, 1% to profit, 20% to tax, 30% to owners pay, etc.
Speaker A:Quarter 1.
Speaker A:Establish a rhythm.
Speaker A:Every 10th and 25th, allocate funds based on your taps.
Speaker A:For example, a £10,000 deposit might split £1,000 profit 10% 3,000 pound owners pay 30% £2,000 tax £4,000 operating expenses.
Speaker A:40% pay bills from operating expenses only.
Speaker A:Cut cost by 10%.
Speaker A:Cancel unused software or negotiate supplier terms at quarter's end.
Speaker A:March 31, June 30, etc.
Speaker A:Take 50% of the profit account as a bonus.
Speaker A:Save the rest as a rainy day fund year one and forever increase taps gradually by quarter two.
Speaker A:Aim for 3% profit by quarter four 5% check your tax account annually with your accountant to cover HMRC obligations.
Speaker A:Jorge and Jose from the book started with 2% profit and now enjoy dream vacations.
Speaker A:Their business serves them, not the other way around.
Speaker A:What if I can't cut 2 10% of expenses?
Speaker A:Start small.
Speaker A:A Swansea retailer I worked with saved 500 pounds monthly by switching to a cheaper energy tariff.
Speaker A:Review your P and L in 0.
Speaker A:Every pound counts, Mike says.
Speaker A:Efficiency comes when you're forced to work with less.
Speaker A:Meet Liam, a Newcastle photographer.
Speaker A:His £170,000 business was chaotic.
Speaker A:Late VAT payments, no savings on day one.
Speaker A:He set up Monzo pots for profit first.
Speaker A:By quarter one he allocated 2% profit, 20% tax, 35% owner's pay and 43% operating expenses.
Speaker A:He cut 1,200 pounds in annual subscriptions by year one.
Speaker A:He took his profit bonuses, paid HMRC on time and hired an assistant.
Speaker A:Liam's now planning a studio upgrade, all from Profit.
Speaker A:Your ACTION STEPS Set up your accounts today.
Speaker A:Visit financiallyhealthybusiness.co.uk for a UK setup guide.
Speaker A:Revamp your to do list to prioritise profit.
Speaker A:Subscribe for future series let's make Profit First Forever.
Speaker A:Thanks for tuning in to Profit first with me.
Speaker A:Deb Halliday if you found today's episode helpful, please subscribe.
Speaker A:Let 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 A:SA.
