Diane GardnerFounder, Adept Business Solutions · Profit First Professional

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

22 Oct 2019 · 0 min

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TAPs are Target Allocation Percentages in Profit First, financial benchmarks based on research of successful companies across industries. They're long-term goals, not starting points. Businesses should move toward their TAPs gradually over months or years, not try to adopt them immediately.

Questions this video answers

TAP stands for Target Allocation Percentages, which are benchmark financial allocation targets derived from the healthiest companies across all industries. They serve as long‑term goals that businesses work toward gradually, starting from their current allocation levels.

No. The mistake is to try to start at the TAPs. Instead, a business should begin at its current allocation and slowly increase toward the TAPs over time, typically over a year or two.

So under the COVID can you tell me about TAPs? What does it mean? How do I use it? TAPs.
So, um, there's tapping where you can tap your body. There are people who 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.