Why is profit sooooooo important?
- It pays for all the necessary stuff
- It pays for all the nice to have stuff
- It pays for all the emergencies and unexpected costs that life throws at you
- It pays for all the fun stuff
- Having enough profit to cover all of the above is enormously satisfying. It feeds the soul. It keeps your financial stress levels low.
Profit By Design
But it doesn’t happen by accident – it happens by design.
Profitable thinking > profit planning > profitable actions.
It happens when you prioritise profit.
Profit Affords Spontaneity!
For the first time EVER, Paul and I made a spontaneous decision to book a holiday.
It’s the first one we have booked for ourselves since our honeymoon 24 years ago!
So this feels extravagant, exciting and terribly indulgent!
But why not. We work hard for it!
We decided to go on holiday last Friday, booked it last Sunday and we fly out next Tuesday!!
We booked 7 nights in St Lucia for our 24th wedding anniversary getaway!
How did we do it?
We’ve been saving £100 a week into a ‘Fun Pot’ so we have the cash available if we decided to splurge and do something nice.
I have a weekly standing order set up for Fridays – so as I waterfall my business accounts, I waterfall my personal accounts!
This extra cash each week factors into my owners pay waterfall in the business. I’ve already factored it in as a a given. As a necessity.
This is in addition to the profit pot that I keep the business!!
Rules for the Fun Pot
The weekly standing order is sacred.
It is protected!
If we need to make hard spending decisions to protect that weekly standing order – then we do it.
If we make a conscious decision NOT to go to Costa, or NOT to eat out, I swipe the cash we would have spent into the Fun Pot!! Rewarding ourselves for a better spending decision!
Birthday cash goes into the Fun Pot – usually!
Sell stuff on eBay? Facebook? It goes in the Fun Pot!
If we have extra funds distributed from the business profit pot at the end of the quarter, it goes in the Fun Pot.
We watch the Fun Pot grow!!
And we make sure we only use the Fun Pot for fun stuff.
It is absolutely NOT allowed to be used for anything else.
Every time we spend our personal cash we ask ourselves – whose pocket is this better in?
Their pocket? Although we might enjoy what we are buying – a trip to the movies, a nice meal out, a gym subscription? Sometimes the answer is YES!! Unless you have limitless profit, sometimes the answer is no…!
Our pocket? Yes, Sometimes – we have to make the difficult decision. A better decision here means more profit there in the Fun Pot pot and we get to our goal faster.
Planning for fun!
We didn’t have any plans when we started saving other than it must be spent on fun stuff.
We didn’t have anything in particular in mind but we knew we wanted to be able to make a spontaneous decision and just do something without having to second guess it!!
So we did it!
And it feels good!!
Just another example of profit hacking to your goals!!
If you need help building your profit pot, then give us a call!!