Page 32 - Improved +Example+Assessment+Report (LG Accrual) {FlipBook Test v1}_Neat (Online upload)

Profit First – (The Importance Of) Accountability

The concept and implementation of Profit First is simple. Sticking to it is the hard part. Our job is to
make sure you stick with Profit First, and to help you navigate the unique challenges that inevitably
present themselves.

Top Profit First Mistakes
Mistake #1 – Going It Alone

Avoid this mistake by working with an accountability partner – the benefits are numerous:
(i) Your sticktoitiveness skyrockets because someone else depends on you
(ii) When you go through a painful process with others, the pain is diminished
(iii) Enforcing or implementing a plan with someone else ensures you are more likely to do your
part
(iv) When you meet regularly, you get into a rhythm that makes it easier to stay on course and
achieve your goal – big aspirational goals get broken down into smaller achievable milestones

Mistake #2 – Too Much Too Soon

You must allocate Profit and not touch it – this means that you need to be sure that your business can
handle that. To increase your profit, we will become more efficient and deliver the same or better results
at a lower cost. We work from the goal backwards.

Start with small percentages to build the habit, and then gradually increase the Profit allocation every
quarter to move closer to your goal. Start slowly and increase slowly – this will deliberately still force you
to look for ways to become more efficient. Adjust the percentages until your reach your TAPs. The power
of reverse engineering profit is that you identify the elements that support the profit – you can remove
everything that doesn’t.

Mistake #3 – Grow First (and Profit Later)

Too many entrepreneurs believe (incorrectly) that you can only have either Profit or Growth. It is not a
trade-off. The healthiest companies figure out how to consistently be profitable first, and then do
everything to grow that. Your business will automatically show you the path to efficient growth when you

put profit first.

Mistake #4 – Cutting The Wrong Costs
If an expense incurred is going to help contribute to the growth of your profit and create significant
efficiency, then find ways to cut costs elsewhere and consider different or discounted equipment, services

31