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Profit First Explained

boutique business boutique business tools boutique ownership education cost of goods sold growth inventory profit first Sep 15, 2022
 

Profit First. It might sound overwhelming, it may seem a little complicated.

Here it is, broken down and simplified:

First, take a look at your total sales and subtract your cost of goods sold. The number you get is your gross margin or in Profit First terms, your real revenue.

Then, take your real revenue and allocate it over four different accounts:

1. Profit

2. Owner's Comp

3. Tax Account

4. Operating Expenses

It's that's simple! And it's a proven way to successfully manage your cash.

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