Profit First?

So I know there’s some other threads already started about Profit first, I’ll probably read them after I post this…

This is for a company that has enough gross sales it justifies having additional accounts to do stuff with.

Q: At what point does it justify having additional account like
-savings for large purchases (so that its like loaning money to yourself)
I’m mainly looking for answers from the guys who have done multiple bank accounts in the past, or currently are. My book keeper suggested it, so I’m just trying to get some feedback to keep my business financial life in order.

We do all of our budgeting with virtual accounts. But I can see where real accounts could help if you struggle with discipline.

As far as when it’s worth it: most bank accounts are $5 or less per month for bank fees. Our bank is $2/month for checking accounts, and that’s just if we opt for the paper statement each month. So, it’s kind of a no-brainer if it looks like multiple accounts could help you stay organized better, regardless of your income.

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I modified “Profit First” to suit me. I don’t run the multiple bank system,
I set up a spreadsheet for myself with total take for the week then break it up by percentages of where I allocate the money using my one bank with a business account and a separate personal account.
On paper I show how I divide up 100% of the money into:

  • Owner pay % (pay this to myself)
  • Profit % (pay this to my business)
  • Taxes % (pay this to business)
  • Payroll % (pay this to myself)
  • Marketing % (pay this to my business)
  • Operating Exp. % (pay this to my business)
  • Savings/Car pymt % (pay this to myself)

Add those percentages up to make 100%.

All the money gets deposited through the business account.
I pay myself from the business account and deposit that into my personal account.

Pretty much the same as what Profit First suggests except I just use one bank and two accounts - Business and Personal.

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I set up multiple seperate accounts in my bank, it really helps keep the discipline for me personally. Profit First has been such a huge game changer this year compared to last.

I’ve been able to keep on top of my expenses and pay myself properly while still saving for the winter. Last year I would go to the hardware store and think “oh I cant live without that for the business!” and then truthfully rarely use it. My operating expenses last year were close to 40% last year (Yikes!) Now with some discipline I have it down to 13%

Cant say enough good things for the methodology and how its helped transform my business!


If you owed taxes last year, then its a good time to implement Profit First. I use it, and it is amazing. When my quarterly federal tax payments come due, I just write a check without stress. Monthly sales tax remittances - done. My profit account? I just used it to buy a hot tub.

I just paid off the work vans in July, so I started an additional account where I’m still making the same “payments” so I’ll have the money there when its time to replace the vans.

At a minimum, using the “trimming the fat” portion of the book will help you get more cash flow immediately. I wish I had starting using this system years before I did.


Wow! all incredible responses. I haven’t actually read the book, but now with all of these response I’m thinking I should at the very least consider reading it…

I know myself, and I struggle with self discipline. It’s weird because I don’t have problems with spending more than I should on the personal side of things, quite the opposite. I think "oh I’ll pay myself as little as possible (17k ish) a year and I’ll have all of that profit in my business account to reinvest and make a whole lot more next year! The problem is that it seems like the money always goes somewhere besides where it was intended… I buy more equipment than I need to, or repairs etc. so by the end of the year I think, where’d all the money go? I didn’t spend it on myself…? But then I look at my P and L and see exactly where it’s gone. It’s a struggle.

I ended up signing up for a number of different accounts. The bank I’m with is totally free to open up new checking accounts and gives you a free gift with every new account. There’s no minimum or fees. It’s AWESOME, compared to Umpqua bank (where I moved from).

You can write yourself a Quarterly Dividend check from the profit. Make it whatever you need to keep enough in the business account to cover allocated expenses. If you hold aside say 20-25% business profit and out of that portion cut a quarterly check of 40-50% of that allocated money leaving 60-50% in the business account, then to yourself you are getting a quarterly bonus. :wink:

The author is actually one of our clients :slight_smile:

I got about 1/3 of the way through the book before my ADHD mind took off and ran with the concept, and developed a system of my own.

One of my main tasks this winter is to dive in deeper into the book and the concepts behind Profit First when I have time to dedicate to it.

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We opened up several accounts after my wife read the book. I think it’s important to glean what is useful for you to implement and do it. Now our money is divided up better and we’re not always overdrawing our accounts. I know it’s helped us to save for taxes, save for personal accounts and having that bonus from the profit account every 3 months is nice. We take 50% of what’s there and either split that between us to spend on whatever we want or put into a joint savings.

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Dude, it’s such a small world when window cleaners talk to each other! lol That’s really cool!

Thanks for sharing man! I read a little of that other thread. SUPER useful!

I just set up separate accounts. I think it’ll be very helpful with my self discipline struggles with purchasing business stuff that I want but don’t need for growth.

That sounds nice!