End of quarter profit distribution time ... woot woot!!
How did that happen? The first quarter of the year is in the books!
How I love this time of the quarter … end of quarter Profit Distribution time! This is where we get to celebrate being shareholders of our own companies and because we have implemented Profit First in our businesses, we know there is Profit to be distributed.
Not a “book” profit.
Not an accounting profit.
Let me repeat that … an actual cash profit.
So in the Profit First world we have some rules about what to do with that Profit Distribution. Let's run through them quickly:
- Don't plow it back into the business. No, no, no … no “reinvesting” in the business. This is your reward for the sweat + past cash investments you have made in the business.
- Take 50% of the cumulative total in the Profit Hold account … not 50% of what was contributed during the quarter … 50% of the ending balance in the account.
- If you still have debt, take a good chunk of that 50% and use it to pay down your debt even faster … but not all of it.
- Even if you are using up to 95% of the distribution to pay off debt, make sure you spend a little just on yourself … the last 5% of the 50%.
Woah! That was a bit of mathematics wasn't it?!
Sorry, I start geeking out on this stuff because I see how powerful it is every day for my clients. I get so excited when I hear about the debt that is being slayed so damn quickly after they implement Profit First in their business. One has paid off US$25,000 in credit card debt in less than a year. Another has never been profitable and now has a 5-figure balance sitting in her Profit Hold account. Yet another never thought she would be able to afford to buy a house, and now she has over US$10k in her house deposit account in just one quarter!
These ladies all did this within 1-2 quarters of implementing Profit First.
And I know personally how exciting it is to get started in being profitable. I did it in my own business. And now I get to take that profit distribution.
EVERY SINGLE QUARTER. QUARTER AFTER QUARTER.
So, yes, I do get quite excited about this time of the year.
And I'd love to know what you're doing with your Profit Distribution today. Hit reply, and let me know...
And if you aren't yet in the position to be taking a quarterly Profit Distribution today...?
Jump on a call with me to see how we can get Profit First implemented in your business in just 5 weeks.
Then you will be celebrating along with me + my clients at the end of the next quarter. How cool would that be?
Whatever amount it is though, wherever you are in your Profit First journey, however tempted you are to skip the end-of-quarter Profit distribution … well, just don’t! Take the distribution + get the dopamine hit that reward gives you. Because you are worth it. Because as the amount grows over time, it is a testament to how you are building a financially healthy company.