What does it mean to put profit first? What are some mistakes business owners make when it comes to profit? How can you implement ‘Profit First’ in your business?
In this podcast episode, Alison Pidgeon speaks with Julie Herres about implementing ‘Profit First’ in private practice.
Meet Julie Herres
Julie Herres is the owner of GreenOak Accounting. The firm provides bookkeeping, accounting, payroll, Profit First services to private practice owners throughout the United States.
Julie and her team have worked with hundreds of private practice owners, so they are uniquely positioned to be a trusted advisor to clients.
In This Podcast
- What does it mean to put profit first?
- Mistakes business owners make
- How to implement profit first
- Things to do
- Mistakes to avoid when implementing ‘Profit First’
What does it mean to put profit first?
Traditionally in accounting, you look at income – expenses = profit. In the book, Mike suggests that you look at income – profit = expenses
Mistakes business owners make
Profit becomes an afterthought and many times this results in the owner not paying themselves. Therefore what we’re trying to do is use the power of allocations so that you’re taking the income and splitting it into 4 main categories:
- Operating expenses
- Owners pay
How to implement ‘Profit First’
- Read the “Profit First” book
- Open separate accounts
- Create a budget plan
- Have a payroll system in place
- Consider all overhead expenses
Things to do
- Create a payroll account
- Do transfers into the accounts weekly for twice a month
- Ensure that all expenses are covered
- Ensure that taxes are paid
- Avoid borrowing from other accounts
Mistakes to avoid when implementing ‘Profit First’
Make sure you put it on the calendar to make sure you’re not borrowing from your future to pay for your present.
- Not putting the transfers on the calendar
- Payment due dates are not considered
- Profit percentages are incorrect
- Not increasing the profit percentages and being intentional with transfers
- Not viewing the business’s financials on a regular basis
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Books mentioned in this episode
- Four-Part Series with Accountant Julie Herres, Part 3: Compensation Structures In Group Practice | GP 09
- Four-Part Series with Accountant Julie Herres, Part 2: Budgeting and Forecasting for Your Group Practice | GP 08
- Four-Part Series with Accountant Julie Herres, Part 1: Getting Your Head Out of the Sand about Your Practice Financials | GP 06
- Grow Your Practice to a Group Practice with Start and Scale a Group Practice Mastermind!
- Email Alison: email@example.com
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- Work with us
- Consult With Alison
Meet Alison Pidgeon
Alison is a serial entrepreneur with four businesses, one of which is a 15 clinician group practice. She’s also a mom to three boys, wife, coffee drinker and loves to travel. She started her practice in 2015 and, four years later, has two locations. With a specialization in women’s issues, the practices have made a positive impact on the community by offering different types of specialties not being offered anywhere else in the area.
Alison has been working with Practice of the Practice since 2016 and has helped over 70 therapist entrepreneurs start and grow their businesses, through mastermind groups and individual consulting.
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