You’ve probably heard of the Profit First methodology.

Pay yourself first. Tuck money into separate accounts. Force profit by limiting what’s left to spend.

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It can be a game changer

But it can also be a death spiral.

Here's why:

Profit First can help you build discipline

...Or it can hide deeper problems that’ll bite you later.

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I’ve seen founders:

• Set up all the accounts, but never fix bad pricing or slim margins
• Lock away cash for “profit,” then scramble for loans because day-to-day cash flow is too tight
• Create a system that feels simpler but actually clouds the financial clarity of traditional accounting
• Pull out profit, cut expenses to the bone, and completely stifle the upside (you can't cut your way to growth)
• Think the system is the strategy instead of doing the real work to understand what’s working, what’s not, and what needs to change

If you’re not careful, you end up celebrating tiny profit transfers while ignoring the bigger leaks in your model.

The most important thing to remember before adopting an ideology like this

Is that Profit First is a behavior tool, not a fix-all.

It won’t:

• Raise your prices for you
• Fix your shrinking industry
• Smooth out lumpy revenue
• Tell you what's worth spending on
• Or make a broken business model profitable

So sure, use it.

But pair it with real financial clarity:

• Know your true margins
• Build a cash flow forecast
• Stress test your plan for slow months
• Allocate capital to high-ROI opportunities
• Be ready to adjust how you deliver, price, and spend

Force profit and create it.

That’s the goal.

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If you’re not sure which one you’re doing, hit reply.

Let’s make sure your profit is real - not just a label on an account.

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Your Daily CFO,

Lauren

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