You’re busy and your revenues look good, but you don’t have as much leftover at the end of the year as you would like.
This is a cash flow problem and there’s no other industry quite like the construction space where having a firm handle on your cash flow is as essential.
If this rings true for you, the Profit First approach to cash flow management and building a consistently profitable business might be right for you. The best thing about it? It’s easy because it works with human psychology rather than against your natural instincts and preferences.
We know that implementing a whole new system of cash management can feel daunting. That’s why we’ve come up with 3 simple steps you can take this summer to begin exploring the Profit First system to see if it’s right for you.
Step 1
➡️ Open a separate bank account and name it ‘Tax Account’.
A lot of business owners determine their cash flow by checking their bank balance. A bank balance is not an accurate picture of your business’ cash flow situation.
Rather than force you to generate cash flow statements (and learn how to read them), the Profit First system has you allocate your cash into different bank accounts. This is a simple way to ensure you don’t overspend and put your business in a cash flow crunch.
The Profit First system recommends several bank accounts, but this summer we challenge you to open just one account: the tax account.
Most of the large banks in Canada offer the option of opening a second savings account at no extra charge. Some even allow you to create a nickname for that account.
Action Step: Once you’ve opened your account and named it, set aside one day per month where you transfer 1% of your monthly revenues into that account.
✅ Step 1 done!
Note: if your bank doesn’t offer a free second account, you can explore banks that do, or skip this step and move on to step 2. Don’t give up yet!
Step 2
➡️ Read the first 2 chapters of the Profit First book
Knowledge is power and learning more about the Profit First system is a great first step.
Action Step: Download the first 2 chapters here for free and read them by the end of the summer.
✅ Step 2 done!
Step 3
➡️ Get your Profit Blueprint
The Profit Blueprint is a free assessment we offer to identify where your business stands financially and creates a plan to help you get started on your Profit First journey.
Action Step: Read more about how it works and sign up for your Profit Blueprint this summer.
✅ Step 3 done!
Often, the hardest part is getting started. We hope this simple list of summer action steps will encourage you to take a little time out of your busy summer to work ON your business, not just in it.
Have questions? Contact us to book a no-obligation call to discuss your business and cash flow challenges.