Maximizing Profit: The Essential Guide to Implementing the Profit First Methodology

Ready to make profit a priority from day one? In this episode, I’ll walk you through the practical steps to implementing the Profit First system in your UK business—no jargon, just straightforward advice you can action right away.

I’m Deb Halliday, certified Profit First Professional, and I’ll show you how setting up five dedicated bank accounts—for Income, Profit, Owner’s Pay, Tax, and Operating Expenses—can bring structure and clarity to your cash flow. We’ll talk about why this simple habit is a game-changer for business owners who want to reduce money stress and build lasting financial health.

You’ll learn how to allocate your income into each account, why it’s so important to adjust your percentages for your unique business needs, and why the Tax account is especially crucial if you’re VAT-registered. I’ll share practical tips for choosing the right banks and setting up your accounts, plus advice on starting small—allocating even just 1% to profit can make a big difference over time.

If you’re ready to take control of your finances, avoid the usual cash flow headaches, and finally make your business work for you, this episode is for you.

Takeaways:

• Why putting profit first is the secret to a healthier, less stressful business
• How to set up and use five key bank accounts for better cash management
• The power of allocating specific percentages to each account, twice a month
• How to handle VAT and tax obligations with confidence
• Why even a small profit allocation is a powerful first step

Links mentioned:

debhalliday.co.uk

Companies and resources featured:

Lloyds, Barclays, Starling, Monzo, Mike Michalowicz, HMRC

Episode Transcript

(00:09):
Welcome to Profit first withDeb Halliday.
That's me.
I'm Deb.
I'm a Profit firstprofessional and trainer, author
of how to Build a FinanciallyHealthy Business, founder of the
Accounts Ladies, an awardwinning accountancy practice and
the Accounts Office Training Academy.
This is the show for businessowners who want to stop stressing
over money, keep more cash,pay themselves more and build a business

(00:33):
that truly thrives.
Just a quick note, Profitfirst is a licensed methodology.
Everything here is designed tohelp you implement it in your own
business.
If you're interested inhelping others with Profit First,
I'll share how you can applyto become certified too.
Let's get started.
Because your business shouldwork for you, not the other way around.

(00:58):
Welcome back to Profit firstwith Deb Halladay.
I'm Deb Halliday and todaywe're getting practical how to set
up your Profit first system tomake your UK business profitable.
From day one.
Grab a cuppa and let's dive in.
Last episode we talked aboutwhy Profit first flips the traditional

(01:19):
business formula, takingprofit before expenses.
Today we'll set up the system.
The core idea is simple.
You'll use multiple bankaccounts to manage your cash flow.
Think of it like envelopes forbudgeting, but for your business.
Here's how to start.
First, open five bank accountswith a UK bank.
Most high street banks likeLloyds, Barclays or digital ones

(01:42):
like Starling work great.
Label them.
Income, profit, owner's pay,tax and operating expenses.
When money comes in, say a5,000 pound client payment, it goes
to the income account.
Then twice a month, Mikerecommends the 10th and 25th.
You allocate percentages toeach account.

(02:03):
What percentages start small.
Mike Michalowicz suggeststarget allocation percentages, taps.
But as a UK business, you'lltweak these.
For example, profit 5 to 10%to build your cushion.
50% for sole traders ordirectors salaries.
Tax 20 to 30% to cover pay orcorporation tax operating expenses.

(02:29):
The rest may be 30 to 40%.
For a UK twist, that taxaccount is critical.
If you're VAT registered,you're setting aside 20% of relevant
sales for HMRC.
For example, a graphicdesigner charging £10,000 plus VAT
allocates £2,000 to the VATCaccount right away.
No more last minute tax scrambles.

(02:51):
You might be thinking my bankcharges fees for extra accounts.
Fair point.
Digital banks like Monzo orStarling often have low or no fees.
And you can set up potsinstead of separate accounts.
The key is separation.
Keep profit and taxuntouchable Review your real revenue.

(03:13):
Look at your last three monthsincome excluding VAT and calculate
your current percentages.
If you're spending 90% onexpenses and keeping 0% for profit,
don't worry.
Start with 1% for profit andadjust monthly.
Over time you'll trim expensesand grow that profit percentage.
This week, Open at least onenew account for profit and transfer

(03:36):
1% of your next invoice.
It's a small win that builds momentum.
Next episode, we'll tacklecommon mistakes UK businesses make
with Profit First.
Subscribe now and let's keepyour business thriving.
Thanks for tuning in to Profitfirst with me, Deb Halliday.
If you found today's episodehelpful, please subscribe, leave

(03:58):
a review and share it withanother business owner who needs
to hear this.
For more resources, coursesand to connect with me, head to debhalladay.co.uk
and remember, when you putprofit first, you build a business
that reduces the stress whileit supports your goals and dreams.

(04:19):
See you next time.
SA.