Taming the Beast: Mastering Profit First for Business Success

Are you tired of working hard in your business, only to find there’s never enough left over for you at the end of the month? In this episode, I’m introducing you to the transformative Profit First methodology—created by Mike Michalowicz—which flips the traditional way of managing business finances on its head.

I’m Deb Halliday, certified Profit First Professional, founder of the Accounts Ladies, and author of ‘How to Build a Financially Healthy Business’. I know firsthand how easy it is for business owners to fall into the “survival trap”—chasing sales, covering bills, and still feeling like you’re running on empty. Traditional accounting says profit comes last, but that’s exactly why so many of us end up with nothing left.

Profit First is all about putting profit first—literally. Instead of sales minus expenses equals profit, we switch it to sales minus profit equals expenses. This simple mindset shift can change everything, especially when you’re facing the challenges of VAT, corporation tax, and rising costs here in the UK.

In this episode, I’ll share real stories and practical insights to help you break free from the cycle of just getting by. We’ll explore why prioritising profit is the key to building a business that not only survives, but truly thrives. Plus, I’ll walk you through the first steps to making Profit First work for you—so you can finally start keeping more of what you earn.

Takeaways:

• Learn why the traditional approach to business finances keeps so many owners stuck—and how Profit First offers a way out.
• Understand the power of prioritising profit before expenses.
• Get practical, actionable steps you can take today to start building a more profitable business.
• Discover how Profit First can help you tackle the unique financial challenges of running a business in the UK.

Links mentioned:

financiallyhealthybusiness.co.uk

debhalladay.co.uk

Companies and resources featured:

Accounts Ladies, Accounts Office, Mike Michalowicz, HMRC, VAT

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.
Profit first 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, becauseyour business should work for you,

(00:54):
not the other way around.
Hello and welcome to Profitfirst with Deb.
Mastering the core principles.
I'm Deb Halladay, a certifiedProfit first professional based here
in the uk, and I'm passionateabout helping you make your business
permanently profitable.
Today we're kicking off withchapter one of Mike Michalowicz's

(01:17):
Profit first called Taming the Beast.
If your business feels like amonster eating your cash, this episode
is for you.
Let's tame that beast together.
Running a business in the UKcan feel like a rollercoaster.
Maybe you're a plumber inLeeds, a boutique owner in Brighton
or a tech consultant in Edinburgh.
You're working hard, chasingsales, but your bank accounts are

(01:40):
always teetering on empty.
Sound familiar?
Mike Michalowicz calls thisthe monster of business.
A beast that grows bigger butnever seems to leave you with profit.
In chapter one, he explainswhy this happens and how Profit first
can change the game.
The problem starts withtraditional accounting, what we call

(02:01):
gaap, Generally Acceptedaccounting principles.
It says sales minus expensesequals profit.
But here's the rub.
Profit is always last, likescraps left after a feast.
For UK businesses, this is brutal.
You're juggling VAT returns,pay corporation tax and rising costs

(02:23):
like rent or fuel.
By the time you pay everyoneelse, there's nothing left for you
or your business's future.
Take Sarah, a new UK cateringbusiness owner.
Her turnover is 150,000 poundsa year.
She pays suppliers, staff andHMRC first.
Last year, her profit was2,000 pounds, barely enough for a

(02:44):
weekend away.
She's trapped in what Mikecalls the survival trap.
When cash is low, she panics,chases any sale, like catering a
low margin event, and takes onnew expenses to support it.
The cycle repeats.
More sales, more costs.
No profit.
You might be thinking, but Ineed sales to survive.

(03:06):
Absolutely.
But sales without profit arelike running on a treadmill.
You're exhausted but going nowhere.
Mike's wake up call came whenhe lost his fortune and saw his daughter's
piggy bank.
It taught him save Profitfirst like a kid stashing pocket
money.
That's the Profit first formula.
Sales minus profit equals expenses.

(03:27):
You take profit first, thenrun your business with what's left.
Why does this matter?
In the UK, our tax system is complex.
VAT at 20% corporation tax atminimum of 19% National Insurance
contributions.
Without a system to managecash, you're always one HMRC deadline

(03:49):
away from stress.
Profit first tames the beastby making profit a habit, not a hope.
It's about facing yourfinancials head on, no matter how
scary.
In chapter one, Mike sharesstories of entrepreneurs like a 15
million pound company ownerwith plastic lawn furniture showing
even big businesses strugglewithout profit.

(04:09):
Focus.
Ready to tame your beast?
Here's your action step fromChapter one.
Draw a line in the sand.
Commit to running a profitablebusiness today.
Then look at your bankstatement and your profit and loss
to find out what your actualprofit is.
After all expenses.
If it's near zero, don't panic.

(04:31):
This series will guide you.
Next episode we'll dive intochapter two how Profit first works
practically for UK businesses.
Subscribe now so you don'tmiss episode two.
Visitfinanciallyhealthybusiness.co.uk for
free.
Profit first resourcestailored for UK businesses.
Let's make Profit first together.

(04:55):
Thanks for tuning in to Profitfirst with me, Deb Halliday.
If you found today's episodehelpful, please subscribe, leave
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

(05:18):
that reduces the stress whileit supports your goals and dreams.
See you next time.
Sam.