Profit First Is Even Easier Because Of Dream First Bank!
The life of an entrepreneur is typified by frantic sprints to generate revenue, with the dream that, one day, profit will magically appear. But does it ever? Nope. Not for many.
Business owners have been ingrained with the traditional accounting formula that promises a journey of riches: Sales – Expenses = Profit. The actual result? Expenses perpetually swallow available funds, leaving the owner perpetually stressed and profit perpetually postponed. The business becomes a growing monster that consumes all resources, a pattern that only breeds friction, frustration, and ultimately burnout. So, how do you tame the beast?
The secret to maximizing your financial wins is to adopt a system that works with human nature, not against it, to assure your financial goals. It is about reducing the friction so significantly that you are guaranteed to stick with the process. The core philosophy of Profit First flips the ineffective formula on its head: Sales – Profit = Expenses. Like the pay-yourself-first principle, by taking your profit first, you force your business to become immediately and permanently profitable.
The power of Profit First lies in its psychological foundation. It leverages two powerful behavioral concepts. The first is Parkinson’s Law, which states that demand for a resource (whether it’s time or, in this case, money) will expand to meet the supply. If you have $10,000 in your single checking account, you will find a way to spend $10,000. Profit First harnesses this law by making less money visible for operating expenses. When you remove profit off the top, you are forced to innovate and become leaner, squeezing the most out of the limited funds available for OpEx. Continuing the example, if you take $2,000 for profit first, then you will have $8,000 in your operating expense, and find a way to spend (only) that.
The second concept is the Primacy Effect, the idea that what we encounter first is what we prioritize and place the most significance on. By having profit as the first allocation after revenue comes in, you ensure it is never an afterthought. Profit transforms from an elusive, year-end event into a consistent weekly habit. This simple act of allocation removes the friction of internal debate, willpower, and complex budgeting. In other words, profit just happens.
To implement this low-friction system, you need your bank accounts set up right (and free). Profit First utilizes five foundational bank accounts: Income, Profit, Owner’s Comp, Tax, and Operating Expenses (OpEx). All revenue flows into the Income account, and on a regular rhythm, often weekly, you allocate set percentages to the other accounts. This segregated structure is the physical manifestation of the low-friction commitment. Money designated for taxes cannot be accidentally used for a new office chair; money for profit is protected from daily spending temptation. The system is designed to remove your choice in the moment, making consistent profitability the default. But the system can only be as friction free as the bank you use.
ProfitFirst.Bank powered by Dream First Bank is the first bank designed specifically to support Profit First and to work seamlessly with the Profit First App! The ProfitFirst.Bank powered by Dream First Bank understands that the more seamless the execution of the Profit First system is, the more likely you are to achieve permanent profit.
When you started your business, you envisioned a permanently profitable business. The problem is that traditional approaches are the main reason you aren’t experiencing it. They are too complex. Too confusing. Too full of friction. Today that all changes.
Starting today, you can have a permanently profitable business. Not by working against your human tendencies, but instead by working with them. Not by making things harder, but by making them easier. You are just a few free ProfitFirst.Bank accounts away from permanent profit.
The post Profit First Is Even Easier Because Of Dream First Bank! appeared first on Mike Michalowicz.
