What does TAPS mean and how do I use it?

Venus Ann MichaelProfit Strategist

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

22 Oct 2019 · 0 min

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In this brief interview, Speaker A asks about the meaning and use of "TAPS" within the Profit First framework, especially in the context of COVID. Speaker B explains that TAPS stands for Target Allocation Percentages, which are benchmark percentages derived from the fiscally elite companies across all industries. These percentages represent long‑term goals rather than starting points. The speaker cautions against trying to begin at the TAPS level; instead, businesses should start from their current financial position and gradually work toward the target percentages over time, potentially reaching them within a year or two. The conversation frames TAPS as aspirational goals for profit allocation.

Questions this video answers

TAPS stands for Target Allocation Percentages, which are benchmark percentages derived from the fiscally elite companies across all industries. They serve as long‑term goals for profit allocation. Rather than starting at these percentages, you should begin with your current profit situation, set lower initial percentages, and gradually increase them over time until you reach the TAPS targets.

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 a 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 going to 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.