Is there a GAAP in your Business thinking?

The GAAP (Generally Accepted Accounting Principles) formula for determining a business’s profit is Sales – Expenses = Profit. It is simple, logical and clear. In the GAAP formula profit is a left over, a final consideration, something that is hopefully a nice surprise at the end of the year. Alas, the profit is rarely there and the business continues on its cheque to cheque survival.

Sales – Expenses = PROFIT

With Profit First you to flip the formula to: –

Sales – PROFIT = Expenses

Logically the math is the same, but from the stand point of the entrepreneur’s behaviour it is radically different. With Profit First, you take a predetermined percentage of profit from every sale first, and only the remainder is available for expenses.

If you want help or have any questions in regards to the above then please contact us or find out more about Profit First