How to Make Profit First in Your Business – In Just 7 Minutes with Annette Ferguson

 Discover why you need to prioritize cash management first to gain financial freedom in your business Find out how to ditch that paycheck-to-paycheck attitude and make your money grow an abundance Learn what question should you be reflecting on to know more about your financial status and decisions in your business Resources/Links: Wanting to Find Out How to Manipulate and Grow Your Money More Than What It Is? Learn how to properly prioritize your profit and gain the financial freedom you deserve: Annetteandco.co.uk/PFbook Summary Wanting to ditch that paycheck-to-paycheck lifestyle and grow out your profit? Do you want to know the key to gaining financial freedom in your business? Are you ready to find out what Profit First Accounting is and how it will help save your business from all the financial trouble? Annette Ferguson is a firm believer in shaking up the accounting industry and practicing what she preaches. She loves working with forward-thinking business owners who are passionate about their businesses and their profit. In this episode, Annette talks about how you can gain financial freedom in your business by prioritizing your profits first. She also shares the big question you should be asking yourself in order to reflect what you should financially be dropping in your business. Check out these episode highlights: 01:10 – Annette’s ideal client: “My ideal client is a business owner that is making at least $100k in their business. And they’re typically running a service-based business.” 01:25 – Problem Annette helps solve: “Basically, we help people take home more money from their business ultimately and make sure they have money set aside for tax so there are no nasty surprises.” 01:48 – Typical symptoms that clients do before reaching out to Annette: “So what typically happens is every time you get paid by a customer or client, it seems like you have another bill going out the door. It feels like every time money comes in, it disappears back out.” 02:50 – Common mistakes that people make before they find Annette’s solution: “Well, the thing is that they are exactly those people. They are the people who are driving revenue. And when you’re driving revenue, sometimes you take an eye off the costs.” 03:51 – Annette’s Valuable Free Action (VFA): “What I recommend to people is to gather together all your business bank and credit card statements, ideally for the last year, and to go through them line by line, asking yourself two questions.” 04:40 – Annette’s Valuable Free Resource (VFR): Check out Annette’s Website: Annetteandco.co.uk/PFbook 05:27 – Q: Can all businesses implement the teachings of Profit First? A: Yes. However, you do have to be revenue-generating in order to implement it because Profit First is all about managing the cash that’s coming into your business in a way that is going to give you more profit and save for tax and all those kinds of things. Tweetable Takeaways from this Episode: “When you're driving revenue, sometimes you take an eye off the costs. And so, what we see is that people are focusing on revenue, and sometimes at all costs, and neglecting themselves, neglecting their costs in their business.”…Click To TweetTranscript (Note, this was transcribed using a transcription software and may not reflect the exact words used in the podcast) Tom Poland 00:10 Welcome, everyone, to another edition of Marketing the Invisible. My name is Tom Poland joined today by Annette Ferguson. Annette, good day from down under. A very warm welcome. Whereabouts are you based? Annette Ferguson 00:20 I am based in Scotland in the UK. I’m about 20 miles south of Edinburgh. And thank you for having me on today, Tom. Tom Poland 00:26 Only 30 week clicks from the Fringe Festival then! Annette Ferguson 00:29 Not far at all. Just a short journey! Tom Poland 00:33 Folks, if you haven’t been there, it’s one thing that should go on your bucket list. The Edinburgh Fringe Festival, it’s amazing! And it’s just next door to there in Scotland. For those of you who haven’t met Annette before, she’s a firm believer in shaking up the accounting industry and practicing what she preaches in terms of putting profit first. She loves working with forward-thinking business owners who are passionate about their businesses, and their profit. And that leads us nicely in it to the title today, which is, “How to Make Profit First in Your Business”. Our seven minutes is going to start now. Question number one is who is your ideal client? Annette Ferguson 01:10 My ideal client is a business owner that is making at least $100k in their business. And they’re typically running a service-based business. Tom Poland 01:18 Service-based business, $100k or more. Thank you very much. Question two, how would you define the problem you solve for them? Annette Ferguson 01:25 Basically, we help people take home more money from their business ultimately and make sure they have money set aside for tax so there are no nasty surprises. Tom Poland 01:31 Oh, that little nightmare! Right. And so, tell us, questions three, six, and a half minutes left. So doing well for the time. How does someone know that they should be talking to you about profit first? What’s going on in their business or their life where they think,” My gosh, I’ve got these symptoms that Annette’s just described”? Annette Ferguson 01:48 Yeah. So, what typically happens is every time you get paid by a customer or client, it seems like you have another bill going out the door. It feels like every time money comes in, it disappears back out. And you’re basically living off the financial scraps of your business. Tom Poland 02:01 Right! Do you find that a lot of your clients before they meet you, sort of, you know, check account management clients, “All this money in the account! Let’s spend some.” Annette Ferguson 02:09 Yeah, that’s exactly it. It’s living paycheck to paycheck, proverbially in their business. It is absolutely that. It’s looking at the bank balance and thinking, “Oh, I’ve got some money-” Tom Poland 02:18 “I’ve got money!” And always seem to be running short of cash and probably not even wanting to log into their bank account for fear of what they might see. So, thank you for that. So, five and a half minutes left, we’re talking about very entrepreneurial people here. They’re growth orientated. They’ve got some success already. They want some more, of course. Margins are probably tight, cash not being managed, and so on, but they’re not silly people. They’re going to be trying things to grow. So, question four is, what are some of the common mistakes that you see people making before they become clients of yours? Annette Ferguson 02:50 Yeah, well, the thing is that they are exactly those people. They are the people who are driving revenue. And when you’re driving revenue, sometimes you take an eye off the costs. And so, what we see is that people are focusing on revenue, revenue, revenue, revenue, and sometimes at all costs, and neglecting themselves, neglecting their costs in their business. Tom Poland 03:12 Right. Do you find that a lot of the people, before they become clients of yours, get very excited about sales, but don’t really understand profit? Annette Ferguson 03:18 100%. Yeah. Tom Poland 03:19 Yeah, I think- Annette Ferguson 03:19 That’s exactly it! Tom Poland 03:21 The sign of an entrepreneur is like “So how’s business-like?” and they go, “Oh, great!”, “What does that look like?”, “Well, sales are up!” You know, what else? Annette Ferguson 03:27 Exactly! And they forget that, actually, you know, the vast majority of people go into business to make money for themselves. Let’s, you know, call a spade a spade with. Tom Poland 03:35 That’s a shock. Thank you for that. Four and a half minutes left. What I’m after with question five is one valuable free action, like a top tip. It’s not going to solve the whole cash problem or profit issue or challenge, but it might take them a step in the right direction. Annette Ferguson 03:51 Yeah, so what I recommend to people is to gather together all your business bank and credit card statements, ideally for the last year, and to go through them line by line by line, asking yourself two questions. The first question is, “Is this 100% necessary to keep the proverbial lights on in my business?” And the second question is, “Is this cost delivering me a positive return in terms of money or time?” And if the answer is not yes to either of those questions, then the question I have back is, “What is the purpose of that expense?” And typically, it’s what I call a “money leak” in your business, and it needs to be let down. Tom Poland 04:28 Right, and perhaps you shouldn’t be reappearing on those statements. Great action exercise! Thank you. Three and a half minutes left. We’re after some more valuable resources that we could direct folks to that’s going to help them even more. Annette Ferguson 04:40 Yeah, excellent. So what we’ve been speak...