Profit First: A Revolutionary Approach for UK Entrepreneurs

Profit First is a revolutionary methodology that transforms the traditional approach to business finance by putting profit at the heart of your financial strategy. I’m Deb Halliday, a certified Profit First Professional, and in this episode, I break down the core principles from Mike Michalowicz’s influential book—offering a lifeline for small business owners facing cash flow challenges.

This episode explores the fundamental tenets of Profit First, encouraging a complete shift in how you manage your business finances: profit comes first, not last. By establishing a simple system of allocating funds across dedicated accounts, you can ensure consistent profitability and reduce the stress of financial uncertainty. My aim is to provide you with actionable insights and practical steps to help you implement these principles, guiding you towards a more financially healthy business.

In the first episode of ‘Profit First with Deb Halliday’, we take a close look at this transformative framework and its relevance for UK business owners. I highlight the common financial pressures faced by entrepreneurs—fluctuating income, rising expenses, and the ever-present tax obligations—and explain how the Profit First approach can offer clarity, control, and confidence.

You’ll learn about setting up multiple bank accounts for profit, owner’s pay, taxes, and operating expenses—a practical system that encourages discipline and helps prevent overspending. Drawing on the guidance of Mike Michalowicz, I’ll show you how to integrate Profit First into your daily business routine, providing a clear roadmap to lasting financial well-being.

Throughout the episode, you’ll discover:

• Why prioritising profit before expenses is a game-changer for business owners
• How four simple bank accounts can transform your approach to money management
• The real-world impact of Profit First, with examples tailored to the UK business landscape
• Actionable steps you can take right now, no matter your business size or experience

I also acknowledge the unique challenges UK businesses face, such as managing VAT and tax obligations, and promise to address these nuances throughout the series. My goal is to demystify financial management and empower you to take control of your business finances with confidence.

Takeaways:

• Profit First helps you put profit before expenses, transforming your financial management
• Setting up four distinct bank accounts is key to success with Profit First
• The methodology is accessible to all business owners—no accounting background required
• Profit First is especially beneficial for UK businesses, helping you stay on top of VAT and tax
• Actionable steps are provided to help both new and established businesses achieve financial health

Links referenced in this episode:

financiallyhealthysbusiness.co.uk

debhalliday.co.uk

Companies mentioned in this episode:

Profit First

Accounts Ladies

Accounts Office Training Academy

Mike Michalowicz

financiallyhealthysbusiness.co.uk

debhalliday.co.uk

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

(00:33):
business 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 yourbusiness should work for you, not

(00:54):
the other way around.
Hello and welcome to the firstepisode of our podcast, Profit first
with Deb Halliday.
I'm Deb Halliday, a certifiedProfit first professional based right
here in the uk and I'mthrilled to kick off this series
with a book review of Profitfirst by Mike Michalowicz.

(01:14):
If you're a small businessowner, freelancer or entrepreneur
struggling with cash flow,this episode will show you why Profit
first is a must read and howit can transform your UK business.
Grab a cuppa and let's dive in.
Imagine this.
You're running a thrivingbakery in Bristol, a tech startup
in Manchester, or a freelancedesign business in Cardiff.

(01:38):
Your sales are decent, maybe£100,000 a year, but you're always
stressed about paying bills,VAT or even yourself.
Sound familiar?
That's where profit firstcomes in.
Published in 2014 by MikeMichalowicz, this book isn't just
another accounting guide.
It's a mindset shift thatturns your business from a cash eating

(02:02):
monster into a money making machine.
Mike's core idea is simple yet revolutionary.
Flip the traditionalaccounting formula.
Instead of sales minusexpenses equals profit.
Profit first says sales minusprofit equals expenses.
You take Profit first, thenrun your business with what's left.

(02:22):
Why is this a big deal?
Because Traditionalaccounting, called GAAP, leaves profit
as an afterthought in the UKwith VAT at 20%, corporation tax
at 19% and rising costs thenapproach, let's leaves many businesses
scraping by even when saleslook good.

(02:43):
In the introduction, Mikeshares his own wake up call.
After losing millions from hissecond company, he hit rock bottom
when his daughter offered herpiggy bank to help the family.
That moment inspired Profit First.
The book's first five chapterslay out the foundation.
Chapter one, Taming the Beast,compares businesses to monsters that

(03:05):
grow uncontrollably eatingcash, Mike introduces the survival
trap chasing sales to coverexpenses only to end up with no profit.
Chapter 2 How Profit FirstWorks explains the system.
Set up four bank accounts,profit owner's pay tax, operating
expenses and allocatepercentages of every deposit is like

(03:28):
using smaller plates to eat less.
Smaller accounts force you tospend less.
Chapter 3 the Naked Truthoffers the instant assessment to
face your financial reality,comparing your actual numbers to
healthy targets.
Chapter 4 Choose your ownAdventure helps you customize allocation
percentages for your industry.

(03:49):
Chapter 5 Day 1/4, 1 year, 1and forever provides a step by step
plan to start small, allocatetwice monthly and take quarterly
profit bonuses.
You might be thinking whyshould I care about another business
book?
Here's why profit first standsout for UK businesses.
It's practical, not theoretical.

(04:10):
Mike's storytelling, like his15 million pound company owner with
plastic lawn furniture, showseven big businesses struggle without
profit.
Focus the the book's strengthis its simplicity.
No accounting degree needed.
It's like a budgeting systemfor your business, tailored to human

(04:30):
nature.
In the uk, where HMRCdeadlines and VAT returns add pressure,
Profit first ensures you'reready for taxes and still take home
profit.
What makes the book a game changer?
It's actionable.
Mike gives clear steps likesetting up accounts and cutting 10%
of expenses that you can start today.

(04:52):
It's also universal workingfor new startups or established firms.
My only critique.
Some examples are US Centric,but as a UK Profit first professional,
I'll bridge that gap in thisseries with local tips.
Your Action step Get a copy ofProfit First.
It's on Amazon UK or Audible.

(05:13):
For busy entrepreneurs, skimthe introduction and Chapter one
this week to understand themonster in your business.
Visitfinanciallyhealthysbusiness.co.uk for
a free PDF of the Profit FirstCore chapters.
Our next episode will diveinto what it means to work with a

(05:34):
Profit first professional.
Thanks for tuning in to Profitfirst with me, Deb Halladay if you
found today's episode helpful,please subscribe, leave a review
and share it with anotherbusiness owner who needs to hear
this.
For more resources, coursesand to connect with me, head to debhalladay.co.uk

(05:56):
and remember, when you putprofit first, you build a business
that reduces the stress whileit supports your goals and dreams.
See you next time.
SA.