Profit First for Real Estate Agents by Damon Yudichak

Author:Damon Yudichak
Language: eng
Format: epub
Publisher: Damon Yudichak
Published: 2022-01-05T23:29:59+00:00

Step 3: You have $5,250 in your Owner Pay account to pay yourself. Only pay yourself based on your salary amount. If you pay yourself $2,000 twice a month, take $2,000 as owner pay and leave the remaining $3,250 in the Owner Pay account.

Step 4: You have $9,450 in your Business Expenses account to pay your bills. If you have $5,000 in expenses, pay those bills and leave the remaining $4,450 in the account.

Now your accounts will look like this:

Income *5615 → $0

Owner Pay 35% (TAP 50%) *2617 → $3,250

Business Expenses 63% (TAP 30%) *7632 → $4,450

Your out of sight, out of mind accounts will look like this:

Profit 1% (TAP 5%) *4313 → $150

Tax 1% (TAP 15%) *3861 → $150

Look at the percentages and amounts allocated to each of your accounts. What do you do if there isn’t enough money to pay yourself, pay your taxes and cover your business bills? No, the correct answer is not “jump off a bridge.” Nor is it to put a dunce cap on your pet lizard, George, and make him stand on one leg.

Before today, you may have spent most of your money if it was in the bank account. That solution didn’t work. In addition to not getting ahead, you may have been filled with confusion about where all the money went. Now you have clarity on where the money goes. Soon, we’ll adjust your percentages to move you closer to your target profitability.

Lack of money should be an alarm blaring that something is fundamentally broken in your business. You either do not earn enough or you spend too much—or maybe your business suffers from a combination of both. The Profit First system isn’t the cause of your money problems. The business spends more money than it earns. See this for what it is: a warning. We’ll use this warning to adjust your CAPs until your business becomes profitable.

Even if you can’t pay everything on time, you need to stick to the system so you establish a healthy rhythm of cash flow. It may be a bit erratic now, but give it some time and continue to follow the system. Soon, your cash will flow in and out like the waves at the beach.

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