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It's Simply Math.

Sometimes I get pushback from folks about the many bank accounts involved in the Profit First system. “Isn’t that a little overboard?” they ask. “Can’t I just use a spreadsheet? I mean, come on. It’s just math.”


Well… Kind of.


But kinda not. It’s not the math that works the magic. It’s the structure of the bank accounts and the way that structure aligns with human psychology and behavior.

We use math to inform our forecasts and planning, and we use structures to support our follow-through.


Math can be both functional and fascinating. It can illuminate issues like shrinking profit margins or progress like year-over-year revenue growth. It can advise you on places to cut back by showing you clearly where costs are increasing, and it can help you prioritize where to put your financial energy so it best aligns with your values. When your numbers are accurate and you know what to look for, the math can guide your decision-making in a way few other business metrics can.


But even basic math has a time and place, and for most of us, that time and place is not “whilst in the middle of everyday life.” It’s at our computer with our spreadsheets and bank apps open, or during our weekly CFO meetings, or at our accountant’s office.

Math is what tells us we should aim for a budget of roughly 35% for operating expenses based on our business’s size. It’s not what we use in the heat of a purchase to assess how much of that 35% is spoken for.


For that, we need a structure.


You see, it’s simply not functional to rely on math when making in-the-moment choices about our day-to-day spending. Why? There’s too much to remember. The numbers that affect your bank balance can range from which clients you expect will pay you this week, to which autopayments have hit already this month, to how much needs to be available in 30 days when your next inventory order is due. Trying to “math together” your expected inflow and outflow to help you make purchasing decisions today is too complicated. Better to have a structure that shows you in the moment what is available for spending. That’s where the multiple bank accounts method has changed the game for many entrepreneurs.


Math is not what tells us if we should buy the upgraded printer with the extra bells and whistles while we’re at the office supply store. It’s the balance in our Equipment Purchases account. Math can help us budget for hiring a new employee, but an eye on what’s leftover in the Payroll account after each check date will give a clear picture of the real cashflow.

The point is not to poo-poo on budget spreadsheets and the use of math and calculations to guide spending. It’s to suggest that the missing link between math’s insights and consistent execution is a matter of structure - and that is the primary issue Profit First solves.

If this resonates, if you sense that all your “mathing” has not made a big enough difference for your actual cash flow, I encourage you to give the bank accounts a try. Thousands of small business owners can attest to the clarity and accountability the structure provides.


If you need help or want guidance on getting started, book a free strategy session with us.


We’ll use math to show you how Profit First can impact your business, and we’ll help you put the right structures in place to make it happen.

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