What Your Numbers Are Really Telling You: A Profit First Review
When revenue grows but profit shrinks
You wrapped up another busy year. Revenue looks good on the surface, but your bank account tells a different story. Expenses crept up. Payroll was higher than expected. And somehow, profit did not follow.
This is the trap many business owners fall into. Growth without profitability can feel like spinning wheels: busy but not getting anywhere.
Check your Profit First allocations
Profit First is simple in concept: allocate profit first, then pay yourself in Owner's Pay, and finally cover operating expenses. Did that happen in 2025?
Compare your Current Allocation Percentages (CAPs) to your Target Allocation Percentages (TAPs). Look at each account: Profit, Owner’s Pay, Taxes, and Operating Expenses.
This is your financial health check. It shows where money flowed efficiently and where it leaked.
Which products or clients were most profitable?
Revenue alone can be misleading. Some clients or products may pull in money but cost more in time and resources than they return.
Use a Product/Service Assessment to:
Identify your most profitable offerings
Spot products that cost more to deliver than they earn
Align resources with what actually grows your profit
Know your monthly nut
Your Monthly Nut is the minimum you need to cover all business costs and pay yourself. Calculating this ensures that every revenue decision is measured against real operational needs.
Q1 Actions for Better Profit
Compare CAPs vs TAPs and see where adjustments are needed
Pick one area to increase profit allocation first
Track revenue and expenses with a clear eye toward profit
Get clarity on your business health
Profit First is more than a method, it is a tool to make smarter decisions and ensure profitability. If you want guidance on making sure your business is aligned with the right financial strategies, schedule a service strategy consultation with us.