Profit First: Beyond The Book - Reading The Book Is Not Enough

Welcome to Profit First Beyond the Book, a podcast that takes you beyond the book with Profit First, brought to you by Tim Seymour and the rest of the Profit First Professionals UK and Ireland team. And once again today, I'm joined with the Profit First Pathway team. Deb and Jason, welcome along.

Morning.

Morning, Tim Seymour. There's always a pause with that, but I don't know why. I think it's me. I don't warn you that I'm going to do that, do I? Anyway, today we're going to talk about something that I feel really passionate about, actually, and it's something that came up in a previous episode or conversation we were having, Jason, before, I think. I think I just came out with it and it came out of my mind and I just said, well, when you think about it, a client reading Profit First knows as much as an accountant who's read Profit First, because if you've only read the book, you only know what you've taken from the book. You don't know how to implement, you don't know how to work with a client, you don't know how to put it in your own business. So yeah, I wanted us to have a discussion about this and give our honest sort thoughts on where that sits with us. Um, but just before I come to you both, I'm going to frame it in a way that as an accountant perhaps, or bookkeeper qualified listening to this, you've gone through a lot of exams to get to where you've got to, to become qualified, to learn all the skills, to have all the technical ability to be able to provide the fantastic service that you provide to your clients. Why would you think reading Profit First is enough for you to better do that with Profit First. It doesn't add up. The two things don't go together. Profit First, the book, is an introduction to a concept.

Get—

grab a note of the concept and learning even more and being certified is an educational program you go through, including implementing your own business, which for me is where all the learning takes place. That's where everything starts, and that can start in the Profit First pathway with implementing into your business with us. But that— I just wanted to set that tone and to kind of highlight that, because if we're not blunt about saying it, people probably would get a mixed message. So Jason, what's your thoughts on this topic?

I 100% agree with you, Tim Seymour. There you go. I think that sums it up for me. It's interesting, isn't it? Yeah, there we go. That's the podcast done today. I think that one of the things that also strikes me is we're talking about Profit at First here, of course, but the idea that I expect many of the listeners will be well-read around other people who write entrepreneurial books, the idea that you can read a book and just go, oh, there we go, I'm as good as Daniel Priestley. It's like it, it just doesn't work like that, you know. So I think that there is, there is a lot of this in there. And because we are in a financial world, we're reading a book about finance, we think, okay, that's all fairly straightforward. Um, well, actually, the reality of that is it's not nearly as straightforward as people actually believe it to be. And I think the way that you framed it as it is an introduction to a concept It is not the final answer to the question. I think actually is the piece I would just add on the end of that. And therein lies the learning that happens as people go through certification. It is entirely about going beyond the book, because at the end of the day, we could all read the same book. We're in exactly the same place. We've got— we've consumed the same knowledge. I think one of the other aspects of it that comes to the fore for me is certainly I've had clients who have apparently self-implemented on their own and then get to a stage where they think, I think I need a bit more help now. And there are plenty of tales— we can go into this later if you want— about things that they think they've self-implemented, but they haven't really, is actually what's been going on in the background. But people don't pay enough attention to the fact it is about habit, rhythm, and behavior. In a business. People see it at a very superficial level. Oh, I need to move some money into another account and it sits there until I use it for whatever purpose it's designed, designed to hold. There is an immense amount of underlying work that takes place on the behavioral and the mindset-based approach to what it is as a framework. And I think people gloss over that because it's not very interesting at a surface level. It's like, I want to get to the good stuff. I want to know how much to put in this pot over here because that's moving me forward. It's not if that's all you're doing, because it's missing a large part of what it is actually designed to create within us as individuals, to help us run and think about our businesses in an entirely different way to probably a lot of the conventional ways we've got our business to a certain point over a period of time.

I think there's a— it's fair to say there's quite a few people out there right now cheating, um, if I'm honest, because they're, yeah, I've read Profit First, yeah, it's easy, we just put some money into pots, I can do it for my clients, blah blah blah. Actually, you can't because you're not licensed to use Profit First, and we own the license to Profit First in the UK. So that's point number one. But the more important point is actually If you're cheating, you're not only cheating yourself, you're cheating your clients, because the book does not give you the all-round knowledge that you need to be able to be successful with Profit First. And if it was that simple and you could just read the book and everything would fall into place, why aren't we all— why is everybody in this country running profitable businesses? Why is it that all your clients are not running profitable businesses? You know, because it's not that simple. So, so, Deb, um, thoughts on that? Thoughts on people self-implementing from the book? How do you feel about that?

Yeah, I think that— I mean, the book is written in a way that the, the whole system sounds a simple system, and it is, but it's not necessarily easy to implement. Um, and that's why repeatedly Mike puts through the book, contact a Profit First professional. He even goes to lengths contact us and we will put you in touch with a Profit First professional because he's devised the— and created the certification program to make sure that the integrity of the system is protected, um, and it doesn't lose its way, um, it's not, um, manipulated or, uh, changed in any way from the actual efficiency and the best practice of Profit First. I mean, yes, there's intricacies and there's anomalies that we, we use within the business, but he doesn't go into those in the books. He goes into that in the certification program. So yeah, I think it's self-implement. We've had a lot of clients that have read the book, tried to self-implement, and then either reached out to their original accountant, um, and not had, um, the correct instant assessment. The CAPs, so the Current Allocation Percentages, have been out. Um, the system hasn't worked, and because the accountant hasn't had the training for the accountability, the behavioral aspects, looking at why it didn't work, and kind of just done it as a set and forget So they've done the incident assessment and then the 6-quarter rollout, which the book suggests, um, then they come to us because they desperately want this system to work. They want their outcomes, you know, they want to pay themselves more, they want to be profitable, they want to be able to see the clarity of their numbers and make decisions. And they think that that's a user-friendly, business, uh, focused, business owner-focused system. Um, they don't want spreadsheets, they don't want to be looking at the financial statement, they don't want all these complicated forecasts. They just want to know what money they've got and what they can spend it on. But if you haven't been properly certified, you're kind of like leading the client a bit blind, and they expect you to know because you're meant to be the expert, but you're not the expert in that, in that certification, in that program. Um, so yeah, so that's, that's, that's my experience.

It's the best analogy I can come up with is that classic client conversation with you when they say, Dave down the pub said I can put my lunches through the business, um, I'm going to put all my meals through, and you're telling them, well, no, you can't actually because you're not actually traveling for work, um, so you can't put your lunches through, but Dave down at pub's doing it and his accountant's letting them. There's no difference between that conversation and an accountant now having a conversation with a client talking about Profit First because they've just read the book, they've just heard something, they've just read a concept. Um, you know, you mentioned Daniel Priestley. Well, you don't just become a key person of influence from reading this book, do you? You have to go and find out more, go on his workshops, follow what he's doing. Pay to actually be trained by him and his, his business. You know, you don't just suddenly do it. It's— and it's bizarre that for some reason with Profit First, people do just pick the book up and they think, that's easy, it's putting money into pots, great. No, it's not. It's not just putting money into pots. The whole concept behind it is about flipping the formula. It's about looking at things from a completely different perspective. And if you really don't understand that and think it's just putting money into pots, you're really not doing yourself or your clients a very good service. And actually, it's probably not going to work because without the framework behind it, there's no knowledge of how you can operate this to move them forward to achieve the outcomes that they want to achieve and for you to achieve the outcomes you want to achieve. So, um, yeah, but you know We can go on and reinforce this issue. Jason, you know, you read the book and then in time you joined Profit First Professionals. I read the book and I literally, boom, I saw Mike tell me to email Profit First Professionals and I did what I was told, which is quite unusual for me. But I saw Mike say an email, Profit First Professionals, I emailed, I got on a call with Ron, I joined. I was literally boom, boom, boom, I'm in 100%. You read the book and then I think you joined a little bit later, but you were ready to join when you joined. What made you take that step?

Very good question, actually. I decided to push against an open door, quite frankly. I've been doing outside CFO type work. I had my own methodology about helping businesses increase profitability and so on. But I was in a lot of groups with Americans at the time, and I kept hearing about this thing called Profit First. And quite frankly, for me, it became came a moment of going, do you know what, someone else has worked something else out here, it has traction, people are talking about it, I should really engage with it as a financial professional. I should at the very least be aware of it and what's going on here and why people are talking about it. Um, but I think there's a couple of things that, that happened really. Um, I've always worked client side anyway, so I've always thought that my ability to converse with a client and do that translation piece between bookkeepers, accountants, and like the real world of a client day to day has been fine, but it taught me a lot. And a lot of it came down to the behavioural and the psychological aspects of how we manage money or think about money and the approaches that we can take to be more confident in that. So I think there were a number of things that came together at a point in time for me. But I think one thing that I would say is I'm as proud now to have the certification and the badge as I was 8 years ago when I got it. And I think that really is about— I'm going to say the mission that it stands for, the eradication of entrepreneurial poverty. You know, I have a lot of friends in business in the UK, across the water in the States and so on. And that core idea, we are all in this together and we're all trying our darndest day in, day out to run a better business, help more people, you know, frame that in any sales way you like, but I think that at its core has given my business and my thinking purpose, as opposed to it being a, oh, you know, I just want to complete some stuff. I mean, I don't have an accounting bookkeeping practice. It's never been my job to do VAT returns for people, you know, year-end tax returns and so on. But I think it has definitely added specific purpose in a direction for me. And a couple of other things, if I may, Tim, just on the back of that. Monday mornings, for those that don't know, is the time where we go through a number of different calls on a Monday morning for our members. That takes them all the way through those going through the certification process, those who have just certified, those who are a bit further along, where topics come up. And one of the things that I talk about relentlessly and am ripped for relentlessly is the phrase "document your journey." And the reason for that is from right from the moment of people turning up to their first certification call, they are going to learn and start to appreciate things that take them well beyond what they will have read already in the book. The thinking, the structure, the approach, the opportunities are all in there. Um, you know, and it is a phrase— the whole purpose that we get people to implement in their own businesses, so they have the experience, they can think more laterally than the other 99% of accountants out there who are just delivering on a compliance reactive basis. Nothing wrong with that as a business model, but there is more that you can do as well. And I think that this is a— it's a great indication of there is life beyond the book, and there is a lot of life beyond the book. Think about it in 80/20 kind of context. 20% is reading the book. There's the foundation, the bare bones of it. How it actually lives and breathes in real life, how we as members— so the 3 of us on this podcast this morning We've all read the same 200 pages, but I also know how we have taken the framework and implemented with clients in our own businesses is different. And that's true of the other members as well. It's not a straight homogenous system. We are all deploying exactly the same thing. No, we are deploying the same concept. How we apply the framework appropriately with our clients can be a very different experience. And that's long before you get into different sectors, teams, solopreneurs, and all the other things in between. Um, the next part of that for me is a large part of it is understanding Profit First is about where you're going in the future. Most businesses and most people who read the book are focused on what does my profit assessment tell me about where I am now. The idea of creating a rollout plan that has substance and some degree of factual information behind it with which to create that rollout plan is a whole other science. So yes, you can create a rollout plan because you read the book. Will you create one that is appropriate to the business that you're in, has the right timelines attached to making some of these moves from current percentages to target percentages, is a whole other world. And that, I think, is, is a piece that people only grasp when they start going beyond the book. This is where that work happens. It's where the understanding happens. It's where people move from compliance to advisory. There is an art and a science behind it.

Do you know, there will be people listening to this now, um, accountants and bookkeepers that have read Profit First, probably thinking What's a Rolac plan? And I would say that highlights the whole concept of this conversation. Um, Deb, can I ask you what difference implementing Profit First into your own business with us, with our support, made for you and your business?

Yeah, huge. Um, because I read the book and I thought I did it to the letter, so I thought the system would work because I'd done to the letter, and I am a bookkeeper, um, so I thought that I'd understand it more than others. Um, but when I was doing it, I knew that for me to implement that— I implemented it for 6 months in my own business, and, um, I was still having to, to move money from one pot to another. To— because I was growing, so cash flow wasn't huge, um, but I was still moving it from one pot to another. And I thought, if I want to offer this as a service— I knew it was a licensed methodology, so you have to be certified, have to be part of the Profit First Professionals. Um, so I contacted you, Tim Seymour Seymour, and as soon as I started going through the certification program and having calls with yourself Um, I realized that it wasn't a set-and-forget system. It was because my business was evolving and every month was a different income amount and a different expenses amount, and I needed to take more out of the business. It was the system— the Profit First system had to evolve as well, and it wasn't going to be a case of set that instant assessment and follow this plan for 6 months. So, and the skills and the, um, the help that I got and the suggestions that I got from the community, um, was invaluable because generally there was somebody in the group— if I had a new client that I was implementing Profit First with, um, I mean, which business is simple? No business is simple. They've all got their challenges, you know, they've all got their, um, different chart of accounts, they've got, you know, different seasons, they've got all sorts of different anomalies. But there was always somebody in the group of Profit First Professionals that had a better way to tackle a particular challenge. I call them challenges. Than I'd, than I'd thought about and that I could reference in the book because the book was a generic business and there's no businesses that are generic. I mean, just everyone is different and that's down to the, I mean, the owner and the owner of the business has different needs for the business. So Yeah, so it was, it was the best thing I ever did for my business. I mean, I wasn't going to ever offer it as a service without being a member anyway, because, you know, it's a licensed methodology. And as accountants and bookkeepers, we should be following the rules, you know. So, but yeah, I mean, it was transformational for me in my business. And that process gave me the confidence of implementing it in other people's business, knowing also that I had the backup of weekly calls, or I could just reach out and jump on a call at any point. So I always had— if I didn't know the answer for a business owner at one point in time, by the time I spoke to them again, I have the answer, you know. So, so yeah, so does that answer your question, Tim Seymour?

Yeah, no, no, perfectly. Yeah, and it's, it's, it's interesting because there's always that dual, that dual thing going on with us with, with Profit First Professionals. So that first and foremost, it's about your business, your own business, and making that successful and help and support that journey, especially using the framework of Profit First and all the behavioral mindset, mindset, mindset shifts that we help, you know, help you through. Then it's the client work, and you cannot be successful with your clients if you're not really fully invested in your own Profit First journey. And it's something that I've learned over the last 4 years of us being the license holders over here. It's an area to really focus on, making sure our members are really living and breathing it in their business and not taking shortcuts, so that when they work with the clients, it becomes an easy conversation, it becomes natural, because you understand the nuances, you understand what's going on in your business, and you can reflect on that to support your clients in their businesses. And like you say, every business is different, um, not just different industries, but different things going on, different perspectives, starting from a different point, trying to get to a different point to someone else, you know, different outcomes, having the community to better fall back on and share experiences of different situations in that environment has been so helpful, not just to our members but also to us, you know. I know, Jason, we've had conversations before and we've been on calls with our members and we've come away going, well, I never thought of looking at it from that perspective, or I never thought of doing that, what a fantastic way to look at it. And, and we've learned from these conversations ourselves because we're always learning. We're— Profit First is a continual journey. And once you make that first step onto the Profit First pathway— just see what I did there, that was good, wasn't it? I want you to do that. I want you to take that first step into Profit First. You know, it, it builds. You start to build momentum, you start to create the habit, and you start to get clarity on your own numbers and your own journey that you're looking to achieve. And once you start, you can't stop. Once you start getting into that habit and you start to see, actually, this is working, I'm going to better pay myself a profit reward soon. I can see the money building up. I've actually got the money set aside to pay myself before, you know, before the end of the month this time, and that's never happened before. And you're starting to see this success gradually build up. And over time you look back and you think, wow, can't believe that's happened now. But it takes time and it takes investment and commitment to the process. And anyone implementing Proper First with support will be successful. What's really interesting is that we've all had slightly different journeys as well. I never self-implemented Profit First because I joined so quickly from reading the book that I went straight in into certification, rattled through Mike's videos of the basic principles, and was straight into implementing in your own business, doing the profit assessment with Liz, who I've spoken about often. She was on one of the previous podcast episodes. So I was straight in there. So I never experienced what it would be like self-implementing. Um, so I've always had the— this is how you do it, this is the framework, this is structure, this is what I followed. Um, and I always find it easy to do. Bumps in the road, of course, obstacles, points of resistance, you know. Do I really have to open a separate account, operate an expense account to the income account? Do I really have to do that? All these things we come across, we get guided through and we get helped through. And then taking it to the next level with taken on the license in the UK because of the differences in the tax system. So that— so there's— this highlights a massive point within this whole conversation, is Mike wrote the book as an American to support worldwide businesses, but he wrote it with the, with the information that he had gained from businesses in the US. Completely different tax system to over here, completely different setup. Um, companies are set up differently, everything's different. We bring it over here, we've got a different angle on how to manage the tax, how to manage different aspects of tax. You know, we've got VAT for a start, we've got corporation tax, we've got self-assessment tax, everything's different. Um, and so you're not going to find out much about that reading the book. So again, there's a, there's a big area that's missing from the information that you gain from simply reading the book. Don't get me wrong, reading the book is a fantastic first, first starting point. It's the place to start. If anyone's listening to this and they haven't read the book, get the book, read it. It will serve you really well and it will help you start your journey. But, you know, please be aware that just by reading the book, you do not know everything there is to know about Profit First. It's a way of life. So yeah, is it— is there anything you want to add to that, Jason? I've been talking quite a lot there. I'm very passionate about this, as you can tell, and sometimes my passion— I don't want it to come across as a rant, which I know it can do sometimes, but just from a point of view of wanting everyone to be successful, because I know what it's done for me, I know what it's done for you, I know what it's doing for our members, and you know, so it comes out that way sometimes. Have you got anything you want to add, Jason?

Yeah, plenty, of course. Um, so first thing, um, profit first. Implementing profit first in our business makes us better business owners. It brings attention to how we structure a business, and at the end of the day, the commercial imperative is our businesses should make a profit. That should not come by chance. It should not be the bit that's left over at the end. It should be an intentional process. So that for me is, is one of the issues. And for anybody going through this process with a non-certified accountant who is apparently doing Profit First with them, just ask them the question about how intentional they are about the profit that they make in their business, or how they make sure they pay themselves properly in their own business, whether they actually pay their own tax on time in their business. These are things that go under the radar Um, free has its advantages for many things, but if you're working with someone who claims to be doing Profit First for free, who is not certified, I can 100% guarantee you, you are being shortchanged. Even if that is coming for free, you are missing out on so much. Yes, there is clearly a cost to working with a certified Profit First professional, but the way to think about that is the return on investment you should be gaining from that will far outweigh some ad hoc advice you're being given by someone who has only read the book, which is exactly the same position that you're probably in. There is a— we have a website, Tim Seymour, I'm sure will put the link up or put it in the notes for you. There is a list on the Profit First UK website with all of the certified Profit First professionals. There are links for you to reach out to them directly. I would encourage you to do so. Um, from an accountant and bookkeeper perspective, I would suggest that the way you actually give yourselves a real competitive edge in your marketplace is by becoming certified. Being someone who has just read the book we've talked a lot in the last half hour about, that gets you in no better position. The nuances that Tim Seymour has just talked about around how we deal with tax, how we think about the framework as a whole, how we break things down, how we analyze things, how we look into the future, how we help you become a proper advisor in business is all wrapped up in that certification process and the ongoing learning that comes thereafter. The real edge is not by reading the book and thinking that's enough. It's not. The other thing I would say is you also touched on something else, and this is definitely a change that I have seen in my time as a Profit First professional. When I started, The idea was you implemented Profit First as a complete implementation, top to bottom, all the bits and pieces that went with it. It was a whole thing done generally in one go, and that's 100% how I started out implementing. In the last couple of years, I think there has been a more incremental approach to it, actually partially implementing, but having a plan about how that builds over a period of time to become a complete system. So again, I would say reading the book does not help you understand how to move from a partial implementation to a full implementation and certainly understand how those pieces fit together. What is the right order for that and how that then rolls out into the future? So this is all down to experience, community learning, getting that additional bit of juice in your, you know, into your, into your offering that says, yep, I've got multiple things that I can do with you that go way beyond the things you've read about in the book. That, from an accountant/bookkeeper perspective, should be helping you to increase your fees. There is value in that. There is not value in reading the book and doing the same thing as your clients who have done the same thing as you, which is just reading the book. Your value comes in understanding how to leverage the framework, how to create real transformations for your clients, and leverage the system to help them do that comfortably, safely, sustainably. This is what it is to go beyond the book. This is what it is to be certified and be an active member of the community. There is so much more to it than just reading the book.

Yeah, I don't think I could have put that any better. I think that was fantastically well put. Thank you for sharing that. And just to touch on what you did suggest, the website for Profit First Professionals in the UK is profitfirstuk.co.uk. So if you are a business owner listening to this because you're interested in Profit First, you've read the book and you want to find how you can work with a certified Profit First professional, go onto the website, look at the Find a PFP side of it, and you'll see most of our— not every member's on there actually, but you'll see most of our members on there, um, and you can reach out directly to them. You can fill out an inquiry form on the website that comes through to me, and I can put you in contact with the appropriate, um, Profit First professional that I think would be the best, best match for you for what you're looking for. We get a lot of people come to us saying they've tried to implement Profit First or they've worked with an accountant, um, working Profit First, but they're not a Profit First professional. Now it's time for me to step up and actually really take ownership of this with a certified Profit First professional. So we do get a lot of leads come through, um, in that way as well. Um, And if you're an accountant or bookkeeper, look, we're not judging you for trying to help people with Profit First. It's a fantastic system, it's a fantastic strategy, it's a fantastic framework. You're not doing them the best service though if you're not a certified Profit First professional, and you shouldn't really be offering Profit First because you're not licensed. You know, we do own the license. It's very important to understand that. Not a lot of people are aware of it. If you are offering Profit First to your clients because you love the system and you see it as an opportunity, go to the website profitfirstuk.co.uk, express interest in becoming a Profit First professional. That form again will come through to me. I will reach out to you, we can have a conversation and have a chat. Don't shy away from it because we want to help you, um, and we want to work with you because you've obviously got a passion for Profit First. You're probably a really good candidate to come and join us. Um, if you're in a position where you like the idea but you're not really confident at the moment with offering advisory, you're not quite sure how you're going to offer advisory to your clients, you can come along and join us in the Profit First Pathway where we will help you implement Profit First in your own business. So in the Profit First Pathway, we will only work with you on your business. You are not allowed to take away what we teach you and pass on to your clients because that would be breaking the licensing rules that we would get you to sign up to and agree to, um, because that comes when you become a fully-blown certified Profit First professional. So this is a kind of pre-membership option and an offer for you so that we can help you with your business. You can understand what living and breathing Profit First is like first before you're ready to go all in and then start, you know, putting that out to your clients and providing that, um, Profit First advisory offer. So That is theprofitfirstpathway.co.uk. So you can hit the website, theprofitfirstpathway.co.uk, or you can go onto Facebook and look up The Profit First Pathway where you'll see our three smiling faces, and you can just hit the, hit the button to request to join, and we'll certainly be letting you in. Um, thank you so much once again, um, Jason and Deb. Really appreciate this conversation. I think it's really important to have this one. Um, I've certainly enjoyed it, and I hope everyone listening has got some got some value from it and, uh, and are ready to start the next steps on their Profit First journey.

Thanks for joining me. Bye-bye.

Thank you for joining us on our podcast today. Profit First Beyond the Book was brought to you by the Profit First Professionals UK and Ireland team. If you'd like to find out more about Profit First or becoming a Profit First professional, head to our website profitfirstuk.co.uk.