The Profit First Twist Most Owners Miss
Three Powerful Ways to Rethink Profit for Strategic Growth
The Profit First methodology has gained serious traction in the world of business finance, and rightly so. It flips the traditional formula of Sales – Expenses = Profit to Sales – Profit = Expenses, ensuring that owners prioritise profitability and create disciplined financial habits. But as with many great systems, the power of Profit First lies not just in the method itself, but in how you apply it.
At The Alternative Board, we regularly see business owners adopt the system — but overlook a few high-impact strategies that could radically enhance their financial clarity and performance. Here are three twists that most owners miss:
1️⃣ Profit Distribution Isn’t Just a Reward — It’s a Leadership Tool
Many owners see their quarterly profit distribution as a personal win (and it is!), but it can also be a strategic communication tool. Regular profit allocation signals to your team, partners, and even clients that the business is financially healthy and sustainably run. This builds trust and confidence across all stakeholders.
Even more powerful? Allocating a small portion of profits to team bonuses or strategic reinvestment in upskilling or tools. This reinforces a culture of ownership and shared success — key ingredients in a resilient, growth-oriented team.
TAB Insight: Use part of your profit allocation to visibly invest in your people — it amplifies motivation and embeds a success mindset in your culture.
2️⃣ The “Drip Account” Twist: Smoothing Out the Spikes
Most owners forget that Profit First isn’t just about creating buckets — it’s about using them proactively. One powerful enhancement is creating a drip account: a separate holding account for large, predictable expenses like taxes, annual licences, CAPEX, or major supplier payments.
You calculate the total needed and then drip-feed that amount monthly into your main operating account. This smooths out cashflow, reduces surprises, and prevents the panic that often hits when big bills arrive.
TAB Insight: Predictable cashflow creates empowered decision-making. When you know big costs are covered, you lead with confidence.
3️⃣ Parkinson’s Law in Action — Intentionally Restrict Operating Cash
One of the core principles behind Profit First is Parkinson’s Law: “Work expands to fill the time (or money) available.” The same is true for expenses. The smaller your operating account, the more disciplined your spending becomes. But this only works if you honour the boundaries.
Most owners forget to put checks in place — and end up dipping into other accounts when things get tight. Instead, assign a team member or finance partner to act as a “gatekeeper” to uphold the integrity of the system and challenge unnecessary spending.
TAB Insight: Constraint drives creativity. Restricting access to cash forces you to lead lean, think smarter, and prioritise what truly moves the needle.
Final Thought: Systems Only Work When You Work Them
Profit First isn’t just a financial tool — it’s a mindset shift. When applied with discipline and a few smart enhancements, it becomes a strategic asset that fuels long-term, sustainable growth.
At The Alternative Board, we help business owners move from reactionary decisions to intentional leadership — and this includes how you view and manage profit. Apply these twists and watch your business not only grow, but thrive with purpose.
I trust this article proves valuable.
Why You Should Schedule a ‘CEO Day’ Every Month
The High-Value Ritual That Helps You Work On the Business, Not Just In It
As a business owner or CEO, it’s all too easy to get consumed by the whirlwind of daily operations. Emails, HR issues, sales calls, customer escalations — the list never ends. But growth doesn’t happen in the noise. It happens in the space you create for strategy, reflection, and big-picture thinking.
That’s why more successful leaders are carving out one critical practice: the Monthly CEO Day. A full day — uninterrupted, intentional, and focused — to work on the business, not in it. Here is what to focus on during this time:
CEO Day Tips for Success
Block it off monthly — and defend it like a board meeting.
Leave the office if needed — a fresh environment sparks fresh thinking.
Don’t overpack it — depth beats breadth.
Capture action steps to feed back into your leadership rhythm.
🔥 Fireside Conversations | 14 May | Kleine Constantia
An unforgettable evening with our TAB members and invited guests—set against the elegant backdrop of Kleine Constantia, where meaningful conversations, refreshments, and a light meal set the stage for insight and inspiration.
“Partnering Vision. Accelerating Growth. Empowering Execution”
Warm regards,
