You make an income,
you go expenses, expenses, expenses, expenses,
and then whatever's left is your profit.
Well, that approach doesn't really help
if you have a goal of how much you want to make
and how much you want to save
and how much you want to profit.
It is very likely that you grew up
in a similar circumstance like I did.
I grew up around lack of abundance
where there were constantly a narrative
around how money is limited,
how it's available only to a few people.
Sometimes even that anybody that has money,
must have done evil deeds.
All of these conversations started to build a money story
in my mind and it tends to be
what a society experiences today.
A lot of our stories that we think
about money and how we behave around money,
what we believe about money comes from borrow ideas
of people that were around us when we were growing up.
What I learned over time is a lot of these stories,
a lot of these beliefs, a lot of these ideas
around money or understanding of money was flawed.
It was based on their perspective of life
and often of their experiences of life
without truly understanding how money works.
You see, when I was about to become a father
for the first time a few years ago,
I had to ask myself a different question.
Until that time as a coach, I was making good money
but I was also spending it all.
I was spending it on the experiences I was having in life.
I was spending it on different investments
I wanted to make in the company.
I was just spending all the money without really thinking
about long-term consequences that it can lead to because,
well, it was only me and my wife
and our priorities were different.
And then we decided we wanna be parents.
And because of that, I had to inquire within
and find out what is it that I truly believe about money
and how is it that I wanna operate going forward.
Also thinking about their future,
my own financial stability and so on, so forth.
Which led me to a goal.
And the goal was I wanna save $50,000 at least every year.
At that point, $50,000 was my benchmark and it was a lot
and it wasn't that immediately I got there,
but eventually I got there.
And to get there, one of the best models that I found
which had a very practical approach
is from a book called "Profit First".
The "Profit First" philosophy is that before you invest
in your business, before you send all the money
that you make out to expenses,
discover how much profit you wanna make
and already deduct it
before you decide what expenses you wanna make
in your business, or what things you wanna buy
and so on and so forth.
It sounds really simple and it is.
And it really leans on the idea of saying
if you pay yourself first, if you profit first,
you will live in a lot more abundance.
And this idea was really powerful for me
to not only design my business finances
but my personal finances, because I started to inquire
what is it that I want to save?
What is it that I want to invest?
And based on that, I would decide how much I can spend
or what I should spend on.
Now, this does not mean you discount experiences
that you wanna have in life but it gives you a good measure
of what you could be saving
by not making unnecessary expenses, expenses
that you are blind to because they're just happening
all around you, without you having real recognition for it.
Let me explore a little bit more how profit first works
and how it could work for you.
You see, we all have certain amount of income
that we make in our business.
And then usually what we tend to do is we just see the money
in a bank account and we say, "What else can I invest in?
And what else can I spend in?
And who else can I hire?
And because of that, our profits usually are unknown
until the end of the year.
You make an income, you go expenses, expenses,
expenses, expenses and then whatever's left is your profit.
Well, that approach doesn't really help
if you have a goal of how much you want to make
and how much you want to save
and how much you want to profit.
The approach to profit first says,
"This is gonna be your income this year.
What's gonna be the profit that you're gonna save?
And now let's look at what I can spend the money on".
Now, there might be some fixed expenses
that of course I included.
And so that will change the equation a little bit
but generally in principle, what you're thinking
about is how much I wanna make,
what do I wanna profit from it?
What am I left with?
And how can I use what I'm left with
to actually make what I wanna make?
Once you take that approach, it makes it easier
for you to take away the profit that you will want to take
by the end of the year.
Now, there are certain things that will be revealed to you
as you're using the profit first approach.
For example, when you have the profit first approach,
you might go, "Well, I wanna make this much money as profit
but my income and my expenses have no way
to really give that money to me, which means
let's say your revenue is 100.
What you wanna take is 50, but your fixed expenses,
the minimum that you have to spend is say 60 or 70 even.
If that's the case, your profit will never turn out
to be 50.
So, what do we do?
In that scenario, you need to start questioning
either your expenses and ask yourself,
do are those expenses absolutely necessary?
It's a great house cleaning exercise, by the way
because suddenly you recognize a lot of the tools
that you're spending for.
You don't really need them anymore.
Or a lot of the services that you have hired are not
really yielding the return that they promised they would.
And it makes it really easy for you
to calibrate your personal finances
and your business finances.
Now, sometimes you will look at your expense sheet
and you'll be like, "You know,
nothing is really negotiate, but everything is good.
We have most optimized expenses.
That's awesome.
Then we look at how is it that we can increase
the overall income of the company
so we can still profit as much as we wanted to.
This would mean that we have to keep the expenses same
but increase the income of the overall company.
And to be able to find how to increase the income
of your company, you have to ask
a few fundamental questions.
For example, you would ask yourself,
how much more money do I need to generate?
How many more clients will I need to generate
that much money?
How much more can I charge per client
to be able to generate that money?
And lastly, how many people do I need
to engage in a conversation with, on an
enrollment conversation with
so I can generate those many clients at that price point".
All of these fundamental questions
will further clarify your business plan,
your marketing plan that will allow you to find out
what is it that you need to make as revenue
with yourself and your company.
And so be able to profit as much
as you want with your company.
Now, this is a really practical approach
and you may think it's overly simplistic
because it is a very simple approach and it's powerful
and you can really implement it immediately
and see some results, but you won't be able
to what you learned in profit first
if you have limiting beliefs in your mind.
So, I wanna offer you nine powerful questions
that you can watch that will help
you unlock your money blocks and create the abundance
that you wanna create in your lives.
So, go ahead and watch this video.
I'll see you there.