Small plates: This principle is based on Parkinson’s Law that the demand for something expands to meet its supply. In other words - when there is less money available, you automatically run your business more economically.
2. Serve sequentially: We place significance on whatever we encounter first. So, when we follow the traditional formula of Sales – Expenses = Profit, profit becomes an afterthought. When this is reorganised to Sales – Profit = Expenses, profit becomes the main focus and paying ourselves first becomes the priority.
3. Remove temptation: Remove the temptation of dipping into your profit account to pay your expenses by transferring your profit to an out of sight bank account.
4. Get into a rhythm: The majority of businesses don’t spend enough time on their cash management. There is no scheduled date to pay bills, these are paid whenever there is money available, so the business operates in starvation mode until the next lot of income is generated. When you consistently make regular transfers to your Profit First accounts you don’t get into a reactive habit of spending too much when you receive money and panicking when your bank account dips.