Do the financials of your business stress you out? Do you feel overwhelmed and lack confidence when it comes to these types of activities?
One of the disciplines people are most curious about is financials. It is a critical piece to becoming a holistic operator inside of a business, but also one of the areas that operators tend to shy away from. But having a CPA is not required to become savvy in financials and use that skill in an executive operational capacity. As an operator you will want to partner with people who have skills and credentials such as a CPA, tax accountant, or bookkeeper. Those people are your secret weapons!
Today, we have Susanne Mariga who is going to talk about “Profit First.”
Susanne Mariga is a Certified Public Accountant (CPA), Certified Tax Coach (CTC), and Chartered Global Management Accountant (CGMA) with over two decades of experience helping clients achieve their financial goals through business and personal tax planning. Before founding her own firm, Susanne worked at Arthur Andersen LLP, as well as one of the Big 4 firms, KPMG. Combining her industry knowledge with her own experience of growing a small business has allowed Susanne to help her clients design unique, profit-first based business plans that ensure success and long-term financial stability. As a Certified Profit First Professional (PFP) at the Mastery Level, she is passionate about helping small business owners and entrepreneurs maximize their revenue and grow their business. She is the host of the Profit Talk Podcast, where she discusses business tips and strategies. She is the author of book Profit First For Minority Business Enterprises (2021). Connect with Susanne at www.susannemariga.com.
Profit First for DOOs
- When you run profit first, it makes managing financials easy
- Often business owners are intimidated and overwhelmed
- Profit first is based on Parkinson’s law: as human beings we are efficient so the more you give us of something the more we’re going to use of it
- It’s the same in business
- Profit first is a cash management system
- We literally create multiple bank accounts based on their purpose
- Ex: profit, taxes, owners pay, operating expenses
“Not until you make profit intentional (revenue – profit = expenses) will you get to have the results that you really want.” – Susanne Mariga
“I learned so much about the finances inside of my own business that it empowered me to have stronger, better, guided conversations with the clients that I support.” – Natalie Gingrich
The Physics of “Profit First”
- You have all of your collections come into one account (revenue account)
- Twice a month on the 10th and the 25th you allocate to your other accounts based on their designated purpose (tax account, owners pay, profit account)
- Whatever is left is an operating expense
“Nothing hurts worse than borrowing from this year’s profit to pay for last year’s success.” – Natalie Gingrich
- Start out small, the best habits you are going to make are slow changes over time
- If you’ve had a bad year, start with 1% profit and build it from there
- When it comes to taxes, there are things you can do
- What are the things that are most important to you right now?
- How do you create tax deductions without increasing expenses?
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