Better Biz Info | A Profit First Professional Firm | Profit First in Kansas City, Missouri 

Do you wonder why you never have any profit leftover? Wondering why your sales are not reflected in your bank balance? If you find yourself consistently experiencing negative profits, this acronym might help you (we did not come up with nor do we own this acronym). 

Low or nonexistent profits are a commonality among business owners and entrepreneurs. You started your business to get paid, and as the most important person in your business, you deserve to make money! But you're not alone if you've been at a loss of what you can do to achieve increased profitability. Try out H.A.C.K., and keep reading for some more tips on how to then achieve permanent profitability in your business. 

Hike Prices: increase prices, bundle, or upsell products/services. 

Business owners are often caught in a trap of thinking that if they want to sell a lot of their product or services, they have to lower the price. You have to really consider what your offering is worth. Are you underselling your value? The real value of your offering is reflected in your price, and that price will attract the kinds of clients and customers that you want. Bundling and upwelling products/services can be a great tool to attract new clients and upgrade existing clients. You can even try out a tiered pricing model (article coming soon!). 

Analyze Every Dollar You Spend: examine every expense, and find cheaper ways to do things. Know your cash flow!

Do you really understand your cash flow? Do you know every dollar that is going out and coming in to your business? My first piece of advice is to establish a cash flow system that creates financial visibility in your business (see the next tip below). Once you can see all the cash in your business clearly, you can start identifying wasteful practices. Tap into the creativity and frugality you needed when you first started your business! 

Cost-Saving Efficiencies: Analyze your processes and figure out which ones you can eliminate or streamline.

I like to tell all my clients to ask themselves the question "why?". When we look at their common practices, procedures, and routines, I ask them "why do you do this?". Almost every time, the answer is "because it's what we've always done!". You need to take a look at the way you're running your business and ask yourself the why behind each thing. Consider better, more efficient ways to do them. Even if something works, consider if there might be a more efficient and cheaper way to do it that still delivers the same value. If something is not working, chances are it's because there is a better way to do it!

Kill Unnecessary Expenditures: Cut out as many expenses as you can without damaging your product/service.

You probably don’t really need a lot of the stuff you are spending your money on. Look at every expense and figure out if you really need it, or if you can do it cheaper. Subscriptions are a great place to start! 

Implementing a System of Financial Visibility

Would you rather increase profits for a month, or ensure permanent profitability in your business? If it's not the latter, I'm not sure if you should own a business. Achieving permanent profitability in your business is not only possible, it's necessary. If you want to leave a lasting legacy on a surviving and thriving business, permanent profitability should be a priority. Luckily, there is a system that helps you to achieve that, as well as 100% financial visibility. 

Profit First 

Profit First is a cash flow management system created by Mike Michalowicz and has been implemented in over 500,000 businesses. The premise of Profit First is that profit should be the most important priority in your business, over expenses! It asserts that you should set aside money for profit first before paying all your expenses (hence the name). This way, you are not left hoping for some money leftover at the end of the month/year to pay yourself that is rarely ever there. You'll also set aside money for owner's pay and taxes. This automatically decreases your because you'll have less left for operating expenses, forcing you to adjust your spending and cut unnecessary expenditures. 

With Profit First, you open multiple bank accounts and transfer a predetermined percentage of revenue into each on a regular schedule. You will set aside money for profit, taxes, owner's pay, and the remainder is what you have to pay your expenses until your next "allocation" day. This system creates a business that has achieved both permanent and growing profitability, and complete financial visibility. It works perfectly with H.A.C.K. to increase profit (H.A.C.K. was actually created by another Profit First Professional like us!) 

Watch this 2 minute video to learn the basics of Profit First!