Profit First My Tea Business

I am super excited to tell you about this mind bending, reality altering practice that will totally blow your socks off, and make you fallen in love with your tea business (again).

Too much hyperbole? Perhaps, but this has revolutionised our way of running our tea business. And I am too giddy not to share.

Here it is - profit FIRST.

This is a concept that will take you off working like a slave and live again.

(Remember why you created your business in the first place?)

Profit First is actually a book from Mike Michaelowicz (bio and website). The gist of it, is that instead of paying yourself last, which usually means nothing is there for you to eat and live, you pay yourself first.

Now this is not exactly a new concept. But if you take this further to the practical side of things, it means if you can't afford to buy X for your business after you pay yourself a fair salary, then don't buy it!

I know it is not as easy to do as it sounds.

I am a work-in-progress Profit First student.

You need to really look at your numbers, and have honest discussions if you want your business to flourish, and you to live like a real person again.

So here are some hypothetical figures to illustrate the point of Profit First your tea business:

Normal accounting / business practice:

+Sales: $15000 per month
-Business Overheads: $5000 per month
-Cost of Goods: $5000 per month
You can take home a pretty sum of $5000 per month.

Let's just say, you need in fact $8000 per month to live "decent".

In the case of Profit First:

+Sales: $15000 per month
-Your Personal Pay: $8000 per month
-Business Overheads: $5000 per month
-Costs of Goods: $2000 per month

Or, you cut overheads AND costs of goods, because you can't afford it. Don't put it on a credit card unless you can clear your card debt COMPLETELY monthly.

Generally speaking you want Overheads, Cost of Goods and Money Home about 1/3 for each.

This is when your business is starting to flow. In your start up phase, it is hard to achieve this but you will be whole heap wiser than me if you start planning for it right from the start of your tea business this way.

Pay yourself, even if it is $100 a week, start the habit. You are the most valuable employee of your company now or in the future, so pay yourself, however little to start.

While I am not affiliated with Mike Michaelowicz or Audible, I love for you to check out Profit First audible book or the real book. Either way, you can thank me later, over a nice lunch and a fine pot of tea ;)