What’s Your Profit First Pace? by Wendy Knutson, CPA

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As Certified Profit First Professionals, we help business owners become proactive to find intentionality in their financial decisions. We also work with ministries to gain greater focus in their finances so they can achieve their vision.

We’ve noticed three different levels at which leaders adopt Profit First (or Vision First for ministries).

Deep Dive

Wade In

Toes-in-the-Water

Let’s discover the Profit First pace that’s right for you!

First, we’ll start with the Deep Dive Pace. The Deep Diver has read Profit First, is pumped up about the possibilities it presents and doesn’t hesitate to implement the Profit First habits. Before we even book their consultation, they have opened multiple bank accounts and started making transfers to their Profit Account. This type of person is an early adopter of new technologies and methods and not afraid to try something new. They think, if something doesn’t work, I can just undo it! Command Z or Control Z is their favorite keyboard shortcut. (If you haven’t figured it out yet, I’m describing myself!) We love the enthusiasm of our clients who take a Deep Dive approach to Profit First. Also, we enjoy being there to give guidance and insight into their (sometimes drastic) financial decisions.

If you have a Deep Dive mentality toward Profit First, be sure your financial decisions make sense. As an example, if you allocated 10% to profit, 15% to taxes, and 15% to owner pay, you would be left with only 60% for operating expenses. In this scenario, you must keep your operating expenses at or below 60%. Otherwise, you’d simply be “borrowing from Peter to pay Paul”.

If the Deep Dive Pace doesn’t work for you, there are more options! Let’s discuss the Wade In Pace. This is the middle-of-the-road approach. We see this pace in a business owner who has read the book but has questions about how to make it a reality. They wait to open their accounts until after we have met and prepared their Profit Assessment. They start at a moderate pace and might ask for our input before making major financial decisions like buying a building or hiring staff members.

If you take a Wade In Pace, our suggestion is to find a guide to help you wade into the waters of Profit First.  Choose a Profit First Certified Professional to hold your hand through the changes that need to come in order to make significant progress.

The third pace is Toes-in-the-Water. This leader is more measured and deliberate with their Profit First decisions. They may or may not have read the book before sitting down to discuss it with us and they are open to the idea of change. We see a much slower pace with adopting Profit First, and that’s not bad! They make intentional decisions to move toward profitability, but it does not happen overnight.

To a Toes-in-the-Water person, we say you should start by moving 1% of your income to a profit account. You won’t miss it. In fact, you’ll be pleasantly surprised at the end of the quarter. If your profit distribution is only enough to take your family out for a pizza dinner, you will have begun the habits that develop into good financial decisions over the long haul.

We don’t feel one pace is necessarily better than the other. In fact, the secret to Profit First isn’t pace at all! The secret is a focus on taking small steps over time. These steps become habits. And the habits generate profits and sustainability. Profit First only works if you work it!

What’s your Profit First pace? How is it working for you? Have you started Profit First yet? If not, call the Knutson CPA office at 817.488.8939 and ask to speak with Lindsay about what Profit First can do for your business.

Promises

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Own it.    All Cards on the Table.    You Really Really Matter.

If you’re around the Knutson CPA office very much, you will hear these phrases used on a regular basis. Why? Because they’re promises. More importantly, they’re OUR promises.

Why do we have promises? We’ve learned that it’s critical to know who we ARE. Just as principles guide us in our personal lives, core values guide us in our business.

When we started consulting with Mike Michalowicz, author of Profit First, The Pumpkin Plan, Toilet Paper Entrepreneur, and most recently, Surge, he encouraged us to develop Immutable Laws for Knutson CPA. He said that these Immutable Laws should be personal to me, as the business owner, so that they could clearly represent who we are as a company. One of the blessings of being a business owner is having the ability to pass along what I consider to be significant values. It’s a joy to let my heart shine through the business; I hope that each person on our team is able let their heart shine as well.

The first thing I decided was to change Immutable Laws to promises, and the Knutson team agreed. The word promise seems to more strongly represent to us what our values really mean.

During a recent brainstorming session, our team defined promises with these terms: commitment, follow-through, character, dedication, fulfillment, integrity, obligation owed, taking action, having an “I care enough” attitude, and knowing that your word is your bond.

We know that promises can be made between people or between organizations (which are really just groups of people.) Promises can be kept. Or promises can be broken.

We should not make promises lightly. Abraham Lincoln once said, “We must not promise what we ought not, lest we be called on to perform what we cannot.”

At Knutson CPA, we make our three Promises to our clients and to one another. They have become the filter through which we operate and the lens through which we view our relationships.

Hopefully, our promises give you insight into who we are. It is essential to build trust in a professional relationship. We hope these promises will be the first step in building your trust in us. As we grow our professional relationship together, our team will strive daily to fulfill these promises to you. Our mission is to empower you, through strong financial principles, to focus on your vision and your hopes and dreams for your organization.

The Knutson CPA Promises:

Own It

Good or bad, we take responsibility for our work, and make it our own.

All Cards On The Table

We will be open and honest with you. Sometimes you might not like what we say, but know that we speak the truth out of respect for you and your organization.

You Really, Really Matter

We truly care about you and your organization and do our best to prove it.

Tax Day When You Implement Profit First

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It’s tax day, friends! More and more of our clients are adopting Profit First in their businesses. As they make their tax payments this year, we are able to see major changes in the psychology behind writing those big checks to the IRS. We talked to one client who said they mailed a BIG check to the IRS last week. (They owed taxes for 2015 and also their April 15 estimated payment.) They also paid their franchise and property taxes that same day! 

Whew! That’s a lot of money to be sending off to the government in just one day. In the past, this would have sent most business owners into a state of panic or depression.

So we asked this client, how does it feel to make these payments now that you have implemented Profit First in your business over the past year? (For a quick primer on how the Profit First system and accounts work, click here.) They said:

“In past years, when tax day came around, I would do everything possible to avoid paying my taxes. I felt panicked that I had to come up with so much cash to pay the government. If I actually had the money (which I probably didn’t), it was a real downer to see my bank account be drained of funds. But this past year, I implemented Profit First in my business. I transferred the prescribed amounts throughout the year. Today when I had to mail a check, all the money I needed was waiting for me in my  tax account.

I feel a strange mix of emotions today. It’s definitely a different feeling than in years past.

  • Today, I feel glad that I have the funds ready to pay these tax bills.
  • I feel sad that I have to spend the cash.
  • I feel empowered– like I can do just about anything because this worked out so well. I have no fear.
  • I also feel like my business is successful. It has value and it matters in this world, and I feel love for this business of mine!”

Wow! What a difference just one year made with this client. We want to bring this change to your business, too!

Are you still teetering on the edge of deciding whether to implement Profit First in your business? Let’s schedule a time to talk through what it can do in your business, and the peace of mind it can bring – on tax day and every day. Call us at 817.488.8939.

How To Make Small Groups or Teams Part of Your Business Dynamic

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We recently discussed a new trend in growing churches- small groups- and how they are very similar to teams or pods in businesses. Today, I want to explore ways you can make teams part of your business dynamic.  We will look at principles carried out by churches who are successful with their small groups.

WORK TOWARD A COMMON GOAL.

Church

Different people with many different personalities and backgrounds merge together in the church. Leadership must constantly help their group members feel engaged by encouraging them to love each other as they should. Ultimately, all churches have a vision of reaching people for Christ. Church staff cast the vision to church leadership (elders, deacons, and ministry leaders).  These leaders then bring the vision to small group leaders who in turn push the vision to the members.

Business

In business, we must focus on the vision and the work we do for the greater good. It’s important to keep the vision front and center so that teams stay focused on what matters most.  Focusing on the vision helps us put aside our differences and work toward a common goal. You must talk the vision, walk the vision, and make it an integral part of your company’s culture. As a bonus, focusing on the company’s vision will help develop cohesiveness within teams while also avoiding a cliquish mentality.

CREATE AN ESTABLISHED STRUCTURE.

Church

Churches who successfully utilize small groups create a structure that works with their member’s culture and lifestyles. This may look like having small groups that are demographically based (like grouping by age, place in life or marital status). Or it could look like having small groups that are geographically based (so that members can attend a small group close to their home or work). Some churches create a blend or something that’s entirely different. What matters most is that they intentionally create this structure based on what they know about their people.

Business

For your teams to flourish, they need to have an established structure. This might look like a buddy system, a peer system, departmental teams, work pods, etc. Find ways to make teams a part of your culture and workflow. The goal is for the teams to feel completely natural.

IMMEDIATELY HELP YOUR NEW EMPLOYEES PLUG INTO A TEAM.

Church

Pastors use sermon-based curriculum to help newcomers as well as members to integrate into small groups. Attenders hear the sermon in worship and are given the chance to flesh it out and live it out with a small group. By making small groups attractive in all discussions, small groups become the lifeblood of the church culture.

Business

When you have a new employee join your business, immediately plug them into a team or pod. As they watch you and other leaders demonstrate commitment to the business model, they will be encouraged to commit to the model as well. Have leadership within each team help the members get to know each other as they live their work lives together.

MENTOR POTENTIAL LEADERS.

Church

Small group leaders in churches watch for potential leaders of new small groups. Elders watch small group leaders for potential elders. Church staff observes elders for potential ministry leaders.

Business

As a business leader you must constantly be on the lookout for possible leaders. You’ll know it when you see it! Once you recognize their potential as a leader, begin recognizing their strengths and trusting their expertise to make the most of their abilities. Spend time mentoring them so that you can recognize what they are passionate about and provide ongoing training and leadership. Don’t leave new-found leaders hanging out there on their own. Keep them engaged. Teach your leadership to recognize potential leaders in their teams and create a step-by-step plan to work them up the leadership ladder.

Constantly shoot for this goal. Empower them with the ability to succeed. Empower them with meaningful work that supports the company’s common goal.

Do you have thoughts about small groups or teams? I would love to hear from you!

How Small Groups in Churches Are Like Teams in Businesses

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Small Groups in Churches

I believe that businesses can learn SO much from churches that are run well. After all, these are organizations that inspire, train and empower dozens of (unpaid) volunteers. These volunteers are essential to the church fulfilling its vision and work for the greater good. Reaching people with the gospel. Churches lead people and get things done with “free” labor! Business owners can learn much by watching how church leaders motivate their unpaid volunteers.

Lets take a look at small groups, an emerging trend among growing churches over the past decade. They are called by many names: life groups, home groups, discipleship groups or Sunday School classes. The purpose and function remains the same: to engage the church body in smaller more intimate settings for spiritual growth, community outreach and personal relationships.

Small Groups cultivate fellowship, spiritual growth, and an empowered church membership. They are often the life-blood of a church’s culture. Church members are much more likely to stay if they are in a small group.

In fact, noted church researcher George Barna and Lifeway’s Thom Rainer combined their research to formulate the following in Rainer’s book, Surprising Insights from the Unchurched and Proven Ways to Reach Them:

Involvement in small groups, such as Sunday School, is key to assimilation… New Christians who immediately became active in Sunday School were five times more likely to remain in the church five years later than those who were active in worship services alone.

Teams in Business

As a business owner myself, I find a strong correlation between small groups in churches and teams – or pods – in business settings.

I’ve noticed that businesses that grow past about a dozen employees can begin to lose the small business feel. It’s just not possible for one business owner to be a CEO and also lead every team member. As you outgrow your ability to meet with and get to know each employee, a scalable team structure will allow you, as the owner, to influence each of your employees through the leadership efforts of other leaders in your organization.

Most business owners are looking for ways to create engagement among their staff members. By creating small teams or pods in your business, you can create natural opportunities for employees to feel more engaged in the operation and culture of the company. Setting up this structure will allow the business owner to lead the leaders (I’ll write more on that in an upcoming post.) and continue to build in scalable layers of leadership and mentoring as the business grows.

The end result of implementing teams or pods is customer satisfaction. How? Teams increase employee satisfaction by helping to foster relationships and a sense of community among employees. When employee satisfaction increases, employees stay longer creating continuity and a better experience for your customers.

Interested in ways to make teams work in your business or small groups thrive in your church? Stay tuned for my next blog post on small groups and how churches (and businesses) can keep their members engaged in them!

My Productivity Planner Vortex

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Hi! My name is Wendy. I am a productivity nerd and a planner addict!

Productivity planners are seemingly the perfect answer to my dilemma of wanting to live a more focused and productive life. However, I want to tell you a brief tale about how focusing on HOW to be productive was actually COUNTERproductive in my life!

Last summer, I purchased the Best Planner Ever, and I have used it faithfully since. In fact, I was SO enamored by the planner that I sent comments to the developer, letting her know what I liked and didn’t like. (Unsolicited feedback, you know is the very best kind. 😉 I do my part!)

As the end of 2015 neared, I couldn’t wait to get my hands on the new, slimmer 2016 model and eagerly ordered it as soon as it was released.

When January 1st rolled around, I met the new year armed with the 2016 version of Best Planner Ever. I was SO excited to dive into this new year and embrace the productivity my planner would bring.

However, I started to notice that my Facebook feed was littered with one planner after the other, touting more perfect solutions to my disorganization, lack of focus and tendency to over-schedule my life. These other planners led me to believe THEY might be the answer to my out-of-control world. I found myself knee-deep in planner shopping before I ever knew what had hit me! Why, oh why, am I so drawn to these ads? (Google and Facebook know a bit about this conundrum when it comes to Google searches and ad placement, by the way! Where else would all those ads on Facebook have originated?)

The commitment that’s required to fully utilize a planner reminds me of the commitment that is needed to embrace a Capsule Wardrobe. And in my case, planner shopping was becoming an addiction when I already had the Best Planner Ever siting on my desk! Like my mom always said, “You should leave with the one who brung you!” The Best Planner Ever and its designer, Jennifer Dawn, have taught me to set goals. This has been a long-time struggle for me. This planner has already helped me make huge progress in this area.

I’ve decided this:

The Best Planner Ever and I have a good thing going. We’ve set goals together, made appointments together, planned dinner together, and even de-cluttered together. I am officially committing to no more planner shopping. I am truly sorry, my 2016, 6-month, chrome-cover edition friend. Please forgive me. From this day forward, I am fully committed to you and all your wonderful features!