Daniel HonanFounder, Profitable Painter CPA PLLC · I help painting contractors increase profits & cash flow while reducing taxes♦ Bookkeeping ♦ Tax

Painting Business Owners: The Importance of Knowing Your Numbers when using the #ProfitFirst method

Name: Painting Business Owners: The Importance of Knowing Your Numbers when using the #ProfitFirst method
Uploaded: 2023-08-21T14:33:10+00:00
Duration: 47 s
Channel: Daniel Honan
Description: In this concise advisory segment, the speaker emphasizes that painting business owners cannot successfully implement the Profit First cash‑flow system…

21 Aug 2023 · 1 min

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0:47

In this concise advisory segment, the speaker emphasizes that painting business owners cannot successfully implement the Profit First cash‑flow system without first having a clear, data‑driven picture of their finances. The key steps outlined are: (1) accurately calculate true operating expenses, (2) determine a realistic tax percentage, and (3) set appropriate owner compensation based on the services rendered. The speaker advises working with a tax planner or finance professional—or gaining the knowledge oneself—to dial in these percentages. Guessing allocations when starting Profit First is warned against, as it leads to failure. The core message is that Profit First should be used in conjunction with, not as a substitute for, a solid understanding of one’s numbers to maximize the method’s benefits.

Chapters

you're probably not going to succeed without really understanding what your numbers are and where you should allocate this profit-first program. So you'll need to go in before you start doing it is understand what are your true costs going to be for your operating expenses? What is a really dialed-in tax percentage? You also have your profit, what you should be paying yourself based off of the services you provide to your company. Work with a tax planner or finance person who understands those costs or get a better understanding yourself to really dial in those percentages. When you start this, this Profit First program, because if you start it and you just kind of guess, like, I guess I want this much, you're probably not going to succeed at least the first time without kind of really understanding what your numbers are and where you should allocate. Profit First, it's not a replacement for understanding your numbers. Like, it works in concordance with understanding your numbers. So you still need to get that, that down so you can really get the maximum benefit out of the system.