Put Profit First
We’ve been suggesting our favorite business books and resources through Feminist Business School and I’ve found the business business ones to be fascinating. They’re written with such an excited voice it makes me imagine the writer getting excited right next to me (which would be somewhat uncomfortable). They’re just so darn excited about what they’ve figured out and want to share the secret with you (all of you).
Profit First is one of those seemingly obvious books that actually is changing the way that I’m thinking through my pricing and business model. In some ways it’s super simple, the expected formula is:
Sales -Expenses = Profit
Makes perfect sense, you save what’s left over once you’ve paid all the things that you think you need to for expenses. But he makes one small change that has a huge impact on how you manage your cash flow:
Sales -Profit = Expenses
I’m still only halfway through the book so I’m interested to hear his strategies for decreasing overall expenses. But just the idea of setting aside that money first. He compares it to a 401k. It gets taken out of our pay checks and we don’t think twice about it. We make do with what’s left. Well, what if we make do with what’s left in terms of business accounting?
Now as you may know, I have some anxiety around money. But I’m getting much more interested in seeing where all of it goes, even if that’s a checking account with a scary low balance.
