Christie JungeA Plus Solutions Inc. · CEO | Profit First Professional

What are 'TAPS' in Profit First? Episode #3 'Under The Covers'

22 Oct 2019 · 0 min

Watch on YouTube

0:14

TAPs are Target Allocation Percentages from the Profit First system, benchmarks taken from the healthiest companies across industries. They show where your profit, owner's pay, taxes, and operating expenses should go, but start where you are now and move toward them gradually, usually over a year or two.

Questions this video answers

TAPs in Profit First terms is an acronym for Target Allocation Percentages. These are percentages that were researched to determine what the fiscally elite, healthiest companies do across all industries. They are not industry‑specific and serve as targets a business can aim to achieve. The mistake is to start at the TAPs; instead, you begin with where you are today and gradually work toward those targets over time.

Yes, TAPs are goal percentages you work toward, not the starting point.

So under the COVID can you tell me about TAPs? What does it mean? How do I use it?
So there's tapping where you can tap your body. There are people actually do this. It's not that. TAPs in Profit First terms is an acronym for Target Allocation Percentages. These are percentages that I did some research as I was writing the book to determine what the fiscally elite companies do, the healthiest of all companies in all industries. So it's not industry-specific, it's in any industry, and reveal these in the book. And as an implementer of Profit First, and I hope you do it, these are simply targets you can set for your business to achieve one day. The mistake that people make is they say, I need to start at the taps. Do not do that. These are what the fiscally elite do. We're gonna start wherever you are today. So maybe you've never had profit before, we'll start low and then we'll grow it slow toward ultimately hitting those taps, maybe in a year or two from now, but that's what we're targeting, not where we're starting.
Perfect, so it's like a goal.
Yep, all right, back under the covers.