Transform Your Business: The Profit First Mindset Shift

Today, we’re diving into the game-changing concept of Profit First—a simple shift that can transform the way you run your business finances. Championing Mike Michalowicz’s proven methodology, I’ll show you why putting profit before expenses isn’t just smart accounting—it’s the key to building a business that truly supports you.

I’m Deb Halliday, Profit First Professional, author, and founder of The Accounts Ladies and The Accounts Office. In this episode, I’ll break down how the traditional “sales minus expenses equals profit” formula leaves so many business owners stressed and struggling. Instead, we’ll explore how flipping the formula—prioritising profit first—can help you create financial security, reduce cash flow stress, and build sustainability into your business from day one.

We’ll talk through the practical steps: setting up separate accounts for profit, tax, owner’s pay, and operating expenses, and how this approach makes cash flow management so much easier—especially with rising costs and ever-changing UK tax rules. You’ll hear real-life scenarios (think: a bakery in Bristol or a freelance designer in Manchester) to help you picture how Profit First can work for any business, no matter the size or sector.

By the end of this episode, you’ll be inspired to rethink your approach to money, take control of your finances, and start building a business that puts your wellbeing first—not just your bills.

Takeaways:

• Discover why putting profit first is the foundation of a financially healthy business
• Learn how allocating a percentage of revenue to profit, tax, and your own pay brings stability and peace of mind
• See how setting up separate bank accounts for each purpose can transform your cash flow
• Understand that Profit First isn’t just a system—it’s a mindset shift for business owners

Links mentioned:

debhalliday.co.uk

Companies and resources featured:

Profit First, Deb Halliday, Accounts Ladies, Accounts Office, 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):
Hello and welcome to Profitfirst with Deb Halliday.
I'm Deb Halladay, or acertified Profit first professional
here in the uk and I'm here tohelp you make your business permanently
profitable.
Today we're diving into whyProfit first is the mindset shift
every business owner needs.
Let's get started.

(01:19):
If you're running a smallbusiness, maybe a cafe in Manchester,
freelance design gig in Londonor an E commerce shop in Glasgow,
you've probably felt the pinchof cash flow.
You're making sales, butwhere's the profit?
Too often we're taught tofocus on revenue minus expenses equals
profit.
But that old formula, salesminus expenses, leaves profit as

(01:42):
an afterthought.
Mike Michalowicz's Profitfirst flips that on its head.
Sales minus profit equals expenses.
That's right, you take yourprofit First.
Why does this matter?
In the uk, with rising costs,VAT obligations and HMRC deadlines,
cash flow is a nightmare for many.

(02:04):
Profit first uses human psychology.
Think of it like putting yoursavings in a separate account before
you spend.
You set up bank accounts forprofit, tax, operating expenses and
your own pay.
Every time money comes in, youallocate a percentage to each.
It's simple but transformative.
For example, let's say you runa Bristol bakery.
Your monthly revenue is £20,000.

(02:27):
Instead of spending it all oningredients, staff and rent, you
allocate 5% to profit 1,000tonnes, 20% to tax 4,000 tonnes,
15% to your salary, 3,000pounds and.
And the rest to expenses.
Suddenly you're saving forvat, paying yourself consistently
and building a profit cushion.
No more scrambling when HMRCcomes knocking.

(02:51):
I hear you asking, but what ifmy business is barely breaking even?
Don't worry, we'll cover howto start small in the next episode.
For now, know this profitfirst works for any business, from
freelancers to SMEs becauseit's about discipline, not size.
So why adopt Profit First?

(03:11):
It forces you to prioritiseprofit, pay yourself and plan for
taxes.
Crucial in the uk with ourcomplex tax system, it's not just
accounting, it's a mindset.
Next time, we'll talk aboutsetting up your Profit first system
step by step.
Want to take the first step?
Check your business bankaccount today and see how much you're

(03:34):
actually keeping as profit.
If it's zero, don't panic.
This series will help.
Subscribe now and I'll see youin the next episode.
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.

(03:54):
For more resources, coursesand to connect with me, head to debhalliday.com
and remember, when you putprofit first, you build a business
that reduces the stress whileit supports your goals and dreams.
See you next time.