This is the year. The year you get real about your financial health.
Spoiler alert: it has a lot to do with your daily habits.
For many of us, our daily life is set around habits, structure, and patterns. Most of us wake up around the same time each day, brush our teeth, do some form of exercise or meditation, and eat a relatively similar breakfast, before heading off to work. We stop at the same coffee shop, park in the same spot, check our email, listen to voicemail, and start the work day.
Here’s the thing: Habits can be helpful or hurtful. If you’ve ever tried to eat better, get at least seven hours of sleep each night, or floss daily, you know that habits are not easy to form or change. And that’s exactly the same for your financial health.
To transform your business into a money-making machine, you must develop sound financial habits, just like how you need healthy dietary habits to lose weight.
Which is exactly how and why Profit First makes so much sense — it’s a method of habits that grow a successful business based loosely on four principles from dietary-science research.
Coincidence? Absolutely not. Here’s a quick overview of how diet and wealth work together to achieve success Profit First Accounting.
Use Small Plates. In a diet, the practice reduces your food intake. But with Profit First, you take out profit first and split the balance into small accounts. With less cash, you’ll be forced to find innovative ways to achieve more with less.
Change Meal Sequence. In a healthy diet, you always eat the low-calorie, nutritious food first. In finance, you take profits first and pay your bills last, so you only spend what you can afford.
Remove Temptations. A healthy diet helps you remove junk food and stock up on healthy food. In Profit First, once you’ve taken your profit, keep it out of sight, out of mind and hard to access.
Make It Consistent. In a healthy diet, you eat small, regular meals so you won’t get hungry and overeat. With Profit First, likewise, don’t wait for your monthly or annual statements to assess your cash position. Log in daily to check your balances. Manage your allocations and payables twice a month.
Small Changes, Big Results
The good news is it’s not hard to inject healthy, positive choices into your life and business. You simply start where you are and make progress every day towards habits that will be healthy for you.
Michael Michalowicz, the author of Profit First, breaks it down even further, sharing his Top 10 Tips to Create Better Habits in 2021.
Be realistic. It’s okay to have lofty goals. But to achieve them, you need to create a group of smaller goals to get there. Celebrate the small wins.
Be mindful. You can be more motivated than the 10 other entrepreneurs in your networking group, but if you are not 100 percent clear on what your “want” looks like, then what are you really going after? Find ways to increase your awareness and be more mindful overall. For you that may be working out, meditation, prayer, yoga, writing — whatever it may be, practice it at the beginning of your day. Because without being mindful, it will be harder to be intentional, which is another important step in creating better habits.
Be intentional. Getting swept away in your day is natural, but not productive. If you set your intentions early on in the day, whenever the static starts to bear down, you can hit that imaginary reset button and return to the intention you set for yourself.
Avoid bad habits. You’re an adult, you know what they are. Avoid the actions that cause the bad habits. Stop the behaviors that are counterproductive. And, stop avoiding the unavoidable. Not checking bank statements will not increase your balances.
Create rituals to foster good habits. Work out clothes folded at the end of the bed. Sneakers on the toilet. Gym bag packed. Automated daily accounting/banking reminders. These are in your face reminders of the bigger picture, of the goal you set for yourself.
Stay accountable. If you follow the Profit First system you know how successful your business will be when you stay accountable. To improve your habits and achieve your goals you must, must stay accountable. Do you check your bank account balance daily? Do you make it a habit to log in and monitor your account balances? That one small step can help you kick off the traction you need to create, establish or maintain just one business goal. And it’s a great way to start the domino effect toward a more profitable business.
Go slow. Little of quality is created within minutes. Small, consistent steps garner bigger results. It takes some patience, but your results will be real and lasting.
Be consistent. Following systems will help you maintain good habits because they are organized and clear cut. All you have to do is follow and apply!
Track your progress. It could be graphs, or milestone balances. It could be as simple as crossing items off a master to-do list. Track it to stack it!
Make decisions that feel good, not guilty. If you implemented Profit First, you know how empowering it was when you opened the five accounts. Then you had those accounts listed for you to see every day. The same is true for physical fitness. Training for that 5K and then finishing it will be empowering. Giving up sugar is torturous, but watching your A1C drop is life changing. Maybe it was daunting at first, but the good decisions, the responsible decisions, ultimately help you change your habits and achieve those business goals.
One More, For The Win
Going to the gym isn’t just for athletes in training. The best business professionals understand that preparing your body physically will help prepare your mind and body to thrive within the entrepreneurial lifestyle.
Don’t take our word for it. Several studies, including this one found that, “eating unhealthily is linked with a 66 percent increased risk of loss of productivity, while lack of daily exercise is linked with a 50 percent increased risk of low productivity.”
So while it isn’t necessary to run five miles or bench 150 pounds, you do need to have a basic level of fitness. So in additional to Michael’s Top 10, Go Figure CEO Rachel Siegel adds this: Move your body every day.
If you want to perform, you must be fit. Running, swimming, going to the gym or doing yoga, it doesn’t matter as long it’s something you enjoy, keeps you fit and becomes part of your routine. You will feel more energized and more efficient at work. Ironically some sports also provide you with a great time to think about work (usually strategy) away from emails and a screen.
