Experience the Profit First Difference
A simple cash flow blueprint that brings clarity and control over your business finances
Profit First Explained
Essentially, Profit First strategies focus on maximizing the amount of profit your business makes at the end of each year. It’s that simple. Rather than focusing on revenue, we spend much more time planning for money your business takes in after expenses, costs, and taxes.
Here’s the basic formula your business probably follows:
Sales – Expenses = Profit
The problem with this formula is that most businesses finalize their 12 month sales period only to find that their profit margin is much lower than desirable. So, why not plan for profit first?
Sales – Profit = Expenses
By planning for the profit margin we want to achieve, we can better determine the figure for expenses. With that in mind, we can more easily plan out our business outcomes and build strategies that meet the expenses forecast.
The only difference between the two formulas above is psychological. The basic formula we all know leaves you at the mercy of your expenses. The profit-first formula allows you to focus on staying on budget with expenses to achieve your desired capital after expenses. Ask yourself, which is more empowering?
The Profit First method is built for business sustainability. Rather than being shocked at how little money your business made at the end of the year, you can actively plan for the profit you desire by keeping your expenses under control.
Profit First is designed for long-term financial success by shifting your mentality from running your business passively to actively taking control of its destiny.
The basic principle is this: you account for your profit, taxes, and income first. Then, whatever figure is left is your budget for expenses.
The idea is not to see your expenses as this gloomy cloud hovering over your business. Instead, you can work with the budget you have and create a strategy that helps your company operate smoothly within that budget.
By doing so, you can know ahead of time which expenses are likely to go out, but more importantly, you can change the expenses, depending on your projections and needs. In fact, expenses are flexible. You can make things cheaper, more efficient, or eliminate them altogether.
Indeed, you can’t alter your expenses once you have already paid them out, and once they chew out most of your income. By planning your expenses, you gain more control over your financial performance, and that’s the aim of the game!
Using this formula, you may find that your business is limited in its spending capacity and that this curbs your progress or innovation.
Yes, we are quite aware that you may have to delay some of your spending on growth in the short-term. But this is only so that you can invest in more significant opportunities in the long-term without endangering your business’s immediate survival.
It’s much wiser to invest your healthy profits back into the business than put yourself and your business at risk.
Profit First is an amazing book and system, but was written with a US market in mind. Almost everything is transferable to a Canadian market and we can help you navigate the differences in regards to sales taxes and income taxes.
Profit First business consulting has a unique approach to ensure your business’s financial success. With the help of professional consultants, we can formulate a unique strategy that sets your business up for long-term success.
Our consultants are experts in business transformation and have vast experience and skills to assist your business with scalable strategy, operations, and marketing systems built to withstand the changing tides of socio-economic demands.
Profit First strategies are built to deliver results. Using their wealth of knowledge from various industries, our Profit First consultants will work closely with your team to implement effective strategies that drive consistent financial success and take your business to the next level.
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Bookkeeping isn’t just reconciling bank statements and maintaining CRA compliance. It’s a powerful process to give insight into the key performance indicators of your business.
We consider ourselves to be strategic partners to our clients, helping you truly understand the financial workings of your business and offering expert advice to help you increase profitability and efficiency. Your goals are within reach, and we’re here to help.
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WHAT OUR CLIENTS ARE SAYING ...
We hired Royer Accounting for personal tax, and to get advice on how to maximize our RRSP contributions. Rather than just giving standard advice, Andrew helped us get a clearer picture of what we want our retirement to look like. We have a clear picture of our end goal and a practical plan on how to get there. He took the time to get to the root issue and with his advice we feel like our retirement dreams are attainable and getting there is less stressful. We highly recommend Royer Accounting!
I have worked with Royer Accounting for my business over the last two years. They have helped me to organize my books, made sure I filed my taxes on time, showed me where my business needs attention, and given me the advice I needed on how to improve my bottom line. I highly recommend Royer Accounting for your business needs, you won't be disappointed!
I have always found Royer Accounting to be helpful in explaining issues, easy to reach on the phone and quick to reply to emails. This has been especially comforting as we have dealt with subpar bookkeepers in the past. I would recommend Royer Accounting to other businesses looking for a bookkeeper and accountant that is friendly, efficient and provides excellent service.
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