Implementing Profit First for Dentists - What you need to know!
Jun 22, 2022
Maybe you're wondering, "How do I implement Profit First?
What do I need to know?"
This week starts a new series where I'll cover each of the core principles of the Profit First for Dentists method over a 5 week period.
Today I'm giving you the basics and then in the coming weeks, we'll dive in to each of the 4 core principles and I'll explain how it all works. It's quite simple - really.
Here's an overview to get started.
- Principle #1: The Small Plates Principle
- An analogy to explain: use a smaller dinner plate to eat less (when you want to be healthier) - likewise use multiple bank accounts that each hold a portion of the total cash available (less money in the account means we spend less)
- Principle #2: Sequence Matters
- We have a cognitive bias to things that come first. By putting Profit first, we pay attention to it, and it comes to fruition. This is the pay yourself first model!
- Principle #3: Remove Temptation
- As cash accumulates in the Profit & Tax accounts, there is a temptation to want to use it (especially if the other accounts run low sometimes). Move this money to another bank and remove the temptation. Do not steal from yourself!
- Principle #4: Enforce a Rhythm
- Once a week, determine allocations and transfer money to each of the bank accounts. The weekly rhythm allows you to easily fund each account.
You need to learn how to flip the formula and why GAAP is holding your profit hostage. Well not really hostage but it can feel like it when you're wondering where all the cash goes each month. Invest the time now to learn these principles and why they are important to the profits in your business.
If you'd like to jump ahead and learn more, head on over to my website and download the first 2 chapters of my book free or purchase a copy on Amazon.
There's some free resources on my website too - so have a look around after you download the 2 chapters.
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