The Secret to a Cash-Rich Business
Why Profit Comes First
In traditional business models, profit is often what’s left over after expenses are paid. But what if you flipped that model on its head? What if you treated profit as a non-negotiable expense, just like rent or payroll? That’s the essence of the profit-first approach.
The profit-first approach prioritizes profitability from day one. Instead of focusing on revenue and hoping for profit, this model ensures that you set aside profit before allocating funds to other expenses. By doing so, you create a cash-rich business that can weather economic downturns, invest in growth, and provide financial security for the long term.
Implementing the Profit-First Approach
Start with a Profit Allocation: Decide on a profit percentage that you will set aside from every sale. This amount is non-negotiable and is treated as an essential expense. The remaining funds are used to cover operating costs.
Reduce Expenses: By allocating profit first, you’re forced to run your business more efficiently. This may involve cutting unnecessary costs, negotiating better deals with suppliers, or finding more cost-effective ways to operate.
Increase Pricing: If your current pricing doesn’t allow for a healthy profit margin, it’s time to reevaluate. Consider raising your prices to reflect the true value of your products or services, while still remaining competitive in the market.
Automate and Delegate: Free up your time and resources by automating repetitive tasks and delegating responsibilities to your team. This allows you to focus on strategic decisions that drive profitability.
Monitor and Adjust: Regularly review your profit allocation and make adjustments as needed. As your business grows, your profit margin goals may change, and your expenses may fluctuate. Stay flexible and responsive to these changes.
Case Study: The Profit-First Transformation of GHI eCommerce
GHI eCommerce (brand name is altered for confidentiality) was struggling with profitability despite strong sales. Their expenses were eating into their revenue, leaving little to reinvest in the business. By implementing the profit-first approach
The journey toward a profit-first business isn’t just about theory—it’s about practical, actionable steps that lead to real financial health. How close is your business to achieving this transformation? The THRIVE eCommerce Business Potential Calculator is your next step. It will assess your current practices and show you how to implement the profit-first model to secure a prosperous future for your business.
Discover the 11 rules to consistently & predictably grow a profitable & cash rich e-commerce business this 2025 without having to rely on your accountant, adding more work on you and best of all without having to guess what the impact of your goals to your financial plans…
On September 28, 2024, one full Saturday in a conference room in Cainta…
I’m putting together a board room of CEO’s and ecommerce business owners and showing them exactly how to consistently & predictably grow a profitable & cash rich ecommerce business…
I’m going to guide you to have the balls to face the truth in your business. Confront the most brutal facts and understand finance as a CEO.
You cannot make a right decision if your financials are not clear. Understanding your financials can help you sleep peacefully at night and achieve all your personal goals sooner than later.
So I’m going to give you the tools to turn your business into consistently & predictably growing a profitable & cash rich ecommerce business…
…with stuff you’ve already got and assets that we will give you WITHOUT needing to hire a full in-house accounting team (especially when you can’t afford it yet!)
You and I will go over everything you need and I’ll give you EVERYTHING to do this for yourself…
Here's what the day will look like:
Session #1: How to Design Profits in your eCommerce Business Starting from Day 1
- Knowing your money levers – So you’ll know how to define the most critical parts of your business when it comes to growing and scaling it
- The Power of One – How to price your products so that it can provide the max profits for your business
- The most important metric and it’s not your Net Profit – How protecting this metric positions you to have the most profitable months without having to sell more and more
- Facing the reality – How understanding your costs can make you a better business owner
- [TOOL] Profit Plan calculator – Even if you don’t have your own accountant or CFO yet, you can keep track of your way to success using our 1 page Profit Plan calculator
Session #2: How to Grow Your Business By Paying Yourself and Hiring Profitably
- Lean is the way – Discover your business baseline operations by setting currents and controls
- Your business is a cash cow – Learn why paying yourself from the business might be the best thing you can do to grow it
- Keeping the BIR happy is a profitability indicator – Why understanding your tax options can actually propel you to growth and more cash
- Don’t aim for breakeven – How to set targets so you can grow consistently and predictably
- Profitable Hiring – Why the businesses that win are those that get the most productivity out of every peso of labor
- [TOOL] Million Peso Cash Flow Model – A rolling cash flow forecast that makes sense for you and your leadership team
Session #3: How to Make Sure Your Goals are Hit in the Next 90 Days
- Fix This First – How to prioritize things when you become a business owner
- How to optimize your cash flow
- The Value of Your Time – How to value your time in the POV of your business
- Define Your Anchors – Discover the 3 anchors that can help you navigate your business to success
- [TOOL] Time-Travel Planner – The surefire way to hit your goals in the next 90 days