Ryan Vaughn shows how to fund a vacation using Profit First, a cash-flow system for small businesses. Set up a dedicated vacation account and transfer a small percentage regularly into it. The key is treating vacation as a planned expense, not an afterthought, so you can take breaks without disrupting operations.
How can I save for a much-needed vacation? So first of all, that phrase, much-needed, I actually hate it when my team members go on vacation and they'll use an autoresponder. In the past, they've said like, hey, I'm out of the office for a much-needed vacation. As the owner, I hate that because I don't want them to feel like work is so stressful and terrible that they have the need, a much need, to take time off. But I get it. Sometimes things can get stressful and we really do need a vacation. So this vacation that you as an owner need Usually is happening or not happening for 2 reasons. You're too busy and there's no time to actually do it. I'm actually going to talk about that in my video next week, so don't forget to subscribe so that you can see that. And then the other reason is they don't have the money to go on the vacation they want to, which is what we're going to talk about today. So if you're not familiar with us, Profit First is a cash flow management system that we are in love with. In the cash flow management system Profit First, if you're a normal business, there's a recommended 5 accounts you set up, and if you're a gym, there's a recommended 7 accounts that you set up. And each of those accounts have a specific purpose. I'm just gonna list the 5 for you pretty quickly. And we have videos that go into detail on these other things. An income account, an account for owner's pay, an account for profit distributions, an account for taxes, and an account for your operating expenses. But the thing is, that's the recommended, like, starting point. And for some businesses, maybe they only stick with those and it works just fine. But as one of the Profit First professional headquarter team members, Aaron Mosher, said, when in doubt, add an account. So at our tax firm, I actually have additional accounts that I use. I have one for my team members. When the income comes in, I want to set aside that money that I'll need to use to pay them on the next payroll coming up. I have a profit sharing account. I use this account to spend money on my team. We do quarterly celebrations out of it. Sometimes we do straight up bonuses. Sometimes we use it to buy things for our team members that they would never buy on their own, what they need and like or want. I even have an internal line of credit account because getting a loan from the bank sucks. And so I'd rather build an amount for me where I'm borrowing from myself. So all that being said, back to the topic. How can I save for a much-needed vacation? If you haven't guessed where I'm going with this, set up a vacation account. It's that simple. Set aside a small percentage or a flat dollar amount so that when you're moving money once a week or twice a month into your different accounts, you're putting aside a little bit into this vacation account. And as we put away a small amount, The small amount isn't going to change the way we run our business. It's not going to drastically affect us. And over time, that balance will get high enough where you're going to be like, I see how I can afford to take a vacation now. Now, taking the time off is another story, which again, we will talk about next week. When it comes to managing your cash and Profit First, One of the most important things is to do a cash flow analysis. It's one of the important 7 steps of the system. So if you want help implementing Profit First in your business, I recommend that you reach out to us, download our free guide. It walks you through the 7 steps of setting up the Profit First. What accounts do you need? How do you do this cash flow analysis? How do you determine the percentages to transfer? It's a game changer. I've been using this for, gosh, I don't know, more than 10 years now. And the comfort and lack of stress that I have now due to cash flow has allowed me to grow my company and focus on things that really move the needle instead of worrying in the back of my mind, like, how am I going to pay for these things? And look, taking vacation is super important. You need breaks, even if it's a much-needed break. We still need those, and having profit allows us to do those things. So remember, profit is a choice. Have the courage and wisdom to choose it. Please remember to like, subscribe, comment, share with your friends. It really helps us get the message out. We want to help businesses stay in business, and we want to Keep their money in their pocket and out of the hands of the IRS.
