Setting profit aside first changes how owners spend and price.
In this article
Separate accounts
Profit, owner pay, taxes and expenses.
Allocation
Percentages of revenue.
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Owner pay
Regular and planned.
Taxes
Money set aside.
Rhythm
Allocate twice a month.
A closer look
Many service owners look at the bank balance to decide what they can spend. That balance mixes tax money, payroll and profit. Splitting money into accounts makes reality visible: if the operating account is short, prices or costs need to change.
Where to start
Open separate accounts and start with small percentages for profit and taxes.
An example
A plumbing company started setting aside a small profit percentage. At year-end, it had a cushion for the first time.
Common mistakes
Starting with unrealistic percentages, skipping allocations and raiding the tax account.
What to track
Track allocation dates, account balances and whether owner pay is consistent.
Questions to ask
Do we know our real profit each month? Are taxes set aside before we spend? Is the owner paid on a schedule or only when there is money left? What would change if we had to live on 90% of revenue?
Price every call so it pays.
We help service businesses set clear policies, book better jobs and turn more calls into profitable work.
Frequently asked questions
What is the Profit First method?
A cash management approach where revenue is split into separate accounts for profit, owner pay, taxes and operating expenses on a regular schedule, so profit is set aside before spending.