What is the Profit First Method?
Profit First, created by Mike Michalowicz and refined for ecommerce by Cyndi Thomason, is a money management method that flips the typical financial equation from Sales-Expenses=Profit to Sales-Profit=Expenses, making profit a priority in your ecommerce business. By using multiple bank accounts to cover your most important areas, you not only increase your understanding of cash flow, but start becoming more profitable as well!
With bank accounts for inventory and taxes, Profit First also helps you with inventory management and tax prep as well. The best part is you can start Profit First in any stage of your ecommerce journey and it will grow right alongside your business!
Getting Started with Profit First
Starting with Profit First is easier than you think. With just a quick assessment and a few bank accounts, you’re ready to start taking your Profit First! This method will change the way you think about money and your business, and get you on the path to profit in no time. These blogs can help you get started:
What’s Different About Inventory?
Inventory can be more confusing for an ecommerce business because cash flow is handled differently than in other areas. However, there are ways to make accounting for inventory a lot easier! You can find everything you need and download our free Inventory eBook Guide here:
No Fee Online Banking Options for Profit First
It can sometimes be a little frustrating to find software that will support your Profit First set-up. There are a ton of options, but it’s hard to know which ones flow best with the method. Luckily, there are several tools out there that make running a business with Profit First a lot easier, and we’ve tested them out so you don’t have to! Here are some of our favorites:
Using Profit First to Increase Profits
Everyone is looking to make more money, but there’s not always a clear way to make that happen. While “selling more” may seem like the obvious answer, driving up profit involves a bit more thought. There are several things you can do to increase profitability in your business, from product design to crunching the numbers.
How to Pay Yourself and Build your Team
Supporting yourself is probably one of the biggest reasons you started your ecommerce business, so how do you know when to start paying yourself and how much you should be making? You’re also an employee who works hard for your business so you should be reaping the rewards of your efforts.
Profit First Challenges for Ecommerce Businesses
Ecommerce businesses have their own unique challenges when it comes to Profit First, but that doesn’t mean you can’t still make it work! By keeping an eye on the numbers and making sure you know what’s important, you can keep the cash flowing and still take your Profit First!
Managing Debt in a Profit First Business
Debt is oftentimes a scary word, especially when it comes to your business. Debt does have its place in a growing business however, you just have to know where that place is and how to use it. By increasing your understanding of it, you’ll not only know how it can help your business, but how to pay it off as well.
Start making data-driven decisions and become more profitable today.