Explain the 4 Principles of Profit First and How to Implement Them

profit first principle implementation

Imagine a financial world where your business doesn’t just survive but thrives. Picture a scenario where profits aren’t an afterthought but the very heartbeat of your operations. This is called Profit First – a revolutionary methodology that’s rewriting the rules of business finance. 

Profit First has four game-changing principles that hold the power to turn your business into a profit powerhouse.

The 4 Profit First Principles

In the business finance world, the Profit First methodology is a beacon of transformative wisdom centred around four core principles that pave the way to financial mastery. 

Let’s delve into these principles and understand their implementation.

Small Plates: An Ingenious Approach to Financial Management

At the heart of Profit First lies the concept of using “small plates,” a metaphor that’s as delightful as it is insightful. Consider them as buckets, each holding a specific purpose, creating a tangible way to manage your financial resources.

This idea is deeply rooted in Parkinson’s Law, which suggests that the demand for a resource expands to meet its supply. Consider the example of a garden’s water supply – when abundant, it’s used carelessly, but when limited, it’s used more judiciously.

Embracing the “small plates” mindset encourages prudent resource consumption, leading to a more frugal and sustainable approach.


  • Allocate your income to various “buckets” (accounts) with distinct purposes.
  • Prioritise different aspects of your business by allocating funds accordingly.
  • Cultivate a more frugal approach to expenses through strategic allocation.

Serve Sequentially: Prioritising Profit with the Primacy Effect

Traditionally, businesses focus on ‘Sales – Expenses = Profit‘, which keeps profit in the background. 

But shifting the equation to ‘Sales – Profit = Expenses‘ ensures profit takes centre stage. 

This is a Primacy Effect, a psychological principle that teaches us that the first encounter with information is often more influential. Applying this to business finances, Profit First advocates serving profit first – placing it at the forefront of your financial strategy.

Prioritising profit aligns with the Primacy Effect but also empowers you to ensure your business’s financial health.


  • Make profit the top priority when allocating funds.
  • Shift your mindset to view profit as a vital foundation.
  • Rebalance your financial strategy to place profit before other expenses.

Remove Temptation: Strengthening Financial Discipline

Just like securing your valuables in a safe, the principle of removing temptation is about fortifying your profit. Imagine your profit as a precious gem, and by placing it in a separate vault, you shield it from hasty spending.

It is similar to hiking with a backpack full of snacks. If your favourite treat is readily accessible, you might indulge more often. However, if you tuck it away in the deeper pocket, you’re less likely to dip into it impulsively. Similarly, by setting aside profit in an account that’s not easily reached, you build a strong barrier against unplanned expenditures.

Much like keeping a delicious dessert out of immediate reach to avoid unnecessary indulgence, isolating your profit ensures a resilient financial bedrock, safeguarding your business’s future.


  • Transfer profit to an account that’s not easily accessible.
  • Create a psychological barrier between profit and daily expenses.
  • Bolster your financial discipline by separating profit from regular transactions.

Enforce a Rhythm: Navigating Financial Health with Consistency

Imagine this principle as tuning the strings of a musical instrument; creating a harmonious financial rhythm, much like composing a balanced symphony. Just as a musician doesn’t wait until their instrument is out of tune to adjust it, your financial strategy benefits from a steady, proactive routine.

Think about it like tending to a garden. Waiting for plants to wilt before watering them leads to uneven growth. In contrast, consistent watering nurtures vibrant, healthy plants. 

Similarly, adhering to a rhythmic financial routine prevents the feast-and-famine cycle that often plagues businesses. Regular transfers to your Profit First accounts keep your business’s financial landscape lush and thriving. This rhythm not only offers clarity amid cash flow’s ebbs but also shields your business from reactive financial turbulence.


  • Establish a regular schedule for transferring funds to different accounts.
  • Avoid the feast-and-famine cycle of erratic financial management.
  • Measure cash flow by adhering to a consistent rhythm.

Implementing Profit First for Your Business

Bringing Profit First principles into business demands commitment, self-control, and adaptability. By wisely dividing your income, managing expenses smartly, making regular transfers, and consistently evaluating strategies, you lay the groundwork for financial success.

Remember, this is a continuous journey. Just as each principle forms a vital piece of the puzzle, seeking advice from financial experts and Business Strategists serves as your compass. They help steer your business in harmony with these principles, ensuring a steady rhythm of growth and prosperity.

Unlock Financial Success with Additional Business Concepts!

Looking to maximise your profits? We’re here to help. As Profit First Certified Professional Bookkeepers, we’re dedicated to shaping a prosperous future for your business. Partner with our expert Business Strategists at Additional Business Concepts. 

​​Worried about your bookkeeping? Your accountant thinks there might be problems with your accounting file? We can review it thoroughly and give you a detailed report with the help of our Bookkeeping questionnaire.

Ready for a transformational journey towards financial triumph that aligns with your goals? Contact us today and let’s unlock your business’s full potential.

Related Posts:

A Guide to Streamlining Your Finances with Profit First

The Benefits Of Using Profit First For Small Businesses

Measuring Performance & Profitability: Profit First vs Traditional Accounting