4 Ways Profit First Helps Fast Growing Entrepreneurs

When I was in the Army, I was in the habit of having a Leatherman tool always on my belt. This modern version of a Swiss Army Knife helped me accomplish everything from opening a Salisbury Steak MRE (Meals Ready to Eat) to clipping razor wire. It was the perfect tool for the job – you just had to know how to strategically use it and to always have it handy.

I was reminded about the versatility of that tool this week as I participated in a live stream presentation of Profit First by Mike Michalowicz (the author of Profit First) and the Bryan/ College Station Chapter of Entrepreneurs Organization (EO). If you have not heard about EO, it is an international group of entrepreneurs that are broken down into local chapters. These entrepreneurs have come together with the specific purpose of encouraging and supporting one another. What I am so impressed about this group is that there are so many fast-growing entrepreneurs and they have goals and big dreams for their companies.

So what is the Leatherman tool that helps entrepreneurs achieve their goals and dreams?

Since the presentation ended, I have had some very honest conversations with many members of the EO group. After hearing more about the dreams and goals that these courageous entrepreneurs have – common themes/ topics kept bubbling to the surface. Here are 4 ways that PROFIT can help the entrepreneur that leads a fast-growing company.It reduces risk. Being an entrepreneur is one of the riskiest things you can do. You have no idea what the next 12 months will bring? What will your sales be like? Will you have supplier problems? Will team, the people you rely on to run your business, be working for you? Will there be major regulatory changes or oversight? The fact of the matter is that you cannot know these answers with certainty. Having profit (cash) in your company allows you to be responsive to some of these unknowns and as a result, makes your operations less risky.

It increases flexibility. Anyone that has operated a business for any amount of time knows that it is constantly changing. In order to stay relevant and valuable in the marketplace entrepreneurs often need to flex and pivot. Sometimes those flexes can be small and the pivots incremental, but other times it requires significant investment. Profit (cash) provides you the fuel to not only make the investment, but also the staying power as you disrupt yourself.

It allows for focus. If you do not have a proper cash reserve in your business, then you are constantly chasing the next sale or collecting an old invoice. You do not have time to work on your business because you are too busy working in your business.

It increases the value of your business. You are not going to run your business forever. As some point you will transition the business to someone else (family, key employees, a strategic buyer) and you will probably want to get the most you can for it. After all, you have poured your life and soul into this company, you have taken risk after risk, and overcome many challenges – so you deserve to be compensated for all that struggle and trial. The way to maximize the value of the company is to show to the buyer how much cash they will be able to put in their pocket. This will allow you to ask (and receive more). Additionally, if you have to do any type of seller financing, then having a consistent profit lowers the risk that you will not be paid out.

This of course is not an exhaustive list of the benefits of Profit in your business. If you have not read Profit First, click on the image below to read my book review of it – and make it a point to put it on the top of your reading list.

Being an entrepreneur is one of the most difficult and demanding things you can do. The good news is that entrepreneurship today is a team sport. Hit the connect button on LinkedIn or Facebook NOW and together we will work towards hitting your 10-year target. Along the way we will increase your profit, strengthen your leadership skills and define your strategic vision. This will lead to confidence in your path, freedom to dream up bigger targets and a strategic banking relationship. When we connect, tell me what you think the best benefit of Profit is in your business.

Greg Martin is an entrepreneur’s insider to the banking industry and passionately believes that every person was uniquely designed for a higher purpose and calling. Greg guides entrepreneurs in achieving their 10-year targets. His deepest passion is living life with his wife of 17 years and their wonderful son. Check out the first comment for a link to more articles, videos, and podcasts.

Greg Martin is an entrepreneur’s insider to the banking industry and passionately believes that every person was uniquely designed for a higher purpose and calling. Greg guides entrepreneurs in defining and achieving their purpose and calling. His deepest passion is living life with his wife and their wonderful son.