I remember sitting down, looking at my business bank account, and thinking, There has got to be a better way. I was working hard, bringing in revenue, yet every dollar seemed to flow right back into the business. That’s how it’s supposed to be, right? Reinvest everything, keep pushing, and it’ll all pay off one day.

But then I read Profit First, and it completely changed how I saw my business finances.

As I looked at the five allocations, it became clear—when I reviewed my operating expenses, I saw that I needed to increase revenue. The numbers don’t lie. Profit First helped me see exactly where my money was going and, more importantly, where adjustments needed to be made.

I realized that the old way of thinking—putting profit last—is what causes so many hopeful entrepreneurs to burn out and give up on their dreams. When I started using this model, I quickly identified the areas where my business was inefficient, allowing me to make smarter financial decisions. But more importantly, I experienced something I hadn’t before: paying myself. Even if it was a small amount at first, it felt good. Watching those numbers grow became a motivating force, proving that my business wasn’t just surviving—it had the potential to thrive.

What Is Profit First?

Developed by Mike Michalowicz, the Profit First method is built on a simple but powerful formula:

Sales – Profit = Expenses

Traditional accounting follows this equation:
Sales – Expenses = Profit

But in that model, profit becomes an afterthought—something that’s left over (if anything is left at all). Profit First flips the script, ensuring that business owners pay themselves first before covering expenses.

How Profit First Works in Practice

The system allocates revenue into different bank accounts to create clarity and discipline in managing finances. Here’s how it typically works:

1. Income Account – All revenue is deposited here before being allocated.
2. Profit Account – A percentage of income (e.g., 5-10%) is set aside for profit before anything else.
3. Owner’s Pay Account – Ensures that you, the business owner, get paid regularly.
4. Tax Account – Reserves a percentage for taxes so you’re not caught off guard.
5. Operating Expenses Account – The remaining balance covers business expenses, keeping your operations lean and efficient.

By consistently setting aside profit first, you avoid the trap of overspending and build a financially healthy business.

Why Profit First Works

1. Forces Financial Discipline – Allocating profit first teaches you to operate within your means.
2. Provides Predictability – You always know what’s available for expenses, taxes, and your paycheck.
3. Eliminates the Feast-and-Famine Cycle – No more waiting for the next big payment just to survive.
4. Reduces Stress – You’re proactively managing cash flow instead of reacting to financial crises.

Choosing the Right Bank for Profit First

To successfully implement Profit First, you need a bank that makes creating and managing multiple accounts easy—without excessive fees or hassle.

If you’re looking for a banking solution that aligns with Profit First principles, I highly recommend NOVO. It offers:

✔️ No minimum balances
✔️ No hidden fees
✔️ Easy account management to allocate funds seamlessly

NOVO is designed for entrepreneurs who want to take control of their cash flow without unnecessary complexity.

Full Transparency: If you sign up using my referral link, we’ll both earn $40—so it’s a win-win!

Profit First isn’t just an accounting system—it’s a mindset shift that empowers you to run your business intentionally and sustainably. Making profit a priority ensures long-term success while reducing financial stress.

If you’re ready to implement Profit First, start by opening a bank account that supports your system—and consider checking out NOVO to make the process even easier!

Have you tried Profit First in your business? Let me know your experience in the comments!