New Year? New Profit First 1% Challenge

Note From Larissa For Donna... Happy New Year's everyone. You may notice the new website layout! Let us know what you think in the comments below or by contacting us directly. We have a busy year of sharing Profit First with you, and are excited to see what you do with these lessons!

Last year, we challenged our readers to embrace the 1% Challenge with minimal guidance. This year, we’re raising the bar. Not only do we encourage you to take on the 1% Challenge, but we’re also providing step-by-step instructions to ensure your success. Let’s make this journey straightforward and impactful.

Last year, I shared my story about Profit First extensively—perhaps too much, haha. This year, it’s not just about my story; it’s about your transformation. I want business owners to see firsthand how Profit First can revolutionize their business. And it all begins with the 1% Challenge. But instead of merely highlighting its benefits, I’m inviting you to walk this path with me through clear, actionable steps.

The First Step: Setting Up the Bank Account

To start the 1% Challenge, you need to visit the bank. Yes, the very first and most critical step involves opening a specific bank account. Why? Because Profit First is built on core principles, one of which is the Small Plate Theory. This theory suggests that if you have money readily accessible, you’re likely to spend it. By setting aside 1% of your revenue in a separate account, you create a barrier between that money and your daily business expenses.

Here’s the key: This account should ideally be with a bank separate from your usual accounts. Why? To introduce friction. The harder it is to access this money, the less tempted you’ll be to dip into it prematurely. Your goal is to deposit that 1% and forget about it until it’s time to celebrate your profits at the end of the quarter.

How It Works

1. Open a Dedicated Account: Visit a bank, preferably one not connected to your primary accounts.

2. Allocate 1% of Revenue: Each time revenue comes into your business, transfer 1% into this new account.

3. Use Remaining Funds as Normal: Operate your business with the remaining 99% of revenue.

It’s that simple. However, simple doesn’t mean easy. Many business owners feel uncomfortable when there’s less money available to spend. This discomfort is natural but manageable. In our next discussion, we’ll dive into strategies to ease this transition and ensure the challenge sticks.

Begin Profit First Now!

For now, your mission is clear: go to the bank, set up that account, and start saving. This is the first step in your Profit First journey, and it’s a game-changer. Let’s get started and make this year’s 1% Challenge a success!