In this episode, I Interview Val DuVick and we talk all about profit first and how to pay yourself as a creative and set yourself up for success when it comes to managing your business’s finances. Val is a former photographer turned Profit First business coach who now spends her time empowering creative entrepreneurs to manage their money well. So many creative business owners struggle with the balance between managing their income and expenses, to also being able to spend their time doing what they love – being creative.
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Managing finances as a creative business owner
Creative entrepreneurs and photographers often start their businesses fueled by passion, talent, and a deep love for their craft. However, their financial struggles can be uniquely challenging. While creativity flows freely, managing finances can feel like navigating a labyrinth. In this chapter, we delve into the distinct financial challenges faced by creatives, debunk common misconceptions about money in the creative industry, and highlight the profound significance of financial stability for creative businesses.
Creative individuals often find themselves battling a host of financial hurdles. From irregular income streams to unpredictable project cycles, the financial landscape for artists, designers, photographers, and other creative professionals can be tumultuous. Many creatives also wrestle with feelings of discomfort or anxiety when dealing with financial matters. This fear of numbers, as Val lovingly calls an “allergy to numbers,” can hinder their financial growth and stability. It’s crucial to recognize these challenges as they form the backdrop for our journey toward implementing Profit First and achieving financial freedom in the creative world.
Despite the challenges, mastering finances is essential for creative businesses. Financial stability not only ensures the survival of a creative venture but also provides the freedom to pursue artistic passions without the burden of financial stress. In the following chapters, we will explore how the Profit First system, with creative entrepreneurs in mind, can transform your financial outlook and empower you to take control of your creative business’s financial destiny.
Why Profit First?
In the creative world, the concept of Profit First might seem foreign, even counterintuitive. Traditionally, creative entrepreneurs have focused on the artistic side of their work, relegating financial matters to the background. In this chapter, we’ll explore the Profit First paradigm—a revolutionary approach to managing finances that flips the script on traditional accounting methods. We’ll learn how this system prioritizes profit, why it’s particularly beneficial for creatives, and the four key components that form its foundation.
Profit First, developed by Mike Michalowicz, challenges the conventional approach to business finance. It suggests that profit should be a priority from day one, rather than an afterthought. Instead of the standard formula (Income – Expenses = Profit), Profit First proposes a new equation: Income – Profit = Expenses. This means that profit is set aside first, ensuring that it’s not merely a leftover, but a guaranteed component of your business finances.
The Profit First system’s appeal lies in its simplicity and effectiveness. It acknowledges the unique financial challenges creatives face, such as irregular income, and offers a practical solution. By allocating funds to different accounts based on specific percentages, creatives can ensure they have money set aside for profit, taxes, owner’s compensation (salary), and operating expenses. This proactive approach not only safeguards your financial stability but also alleviates the stress associated with financial uncertainty. In the next chapters, we’ll delve deeper into the mechanics of Profit First and guide you on how to implement it successfully in your creative business.
What is profit first
Understanding the core principles of Profit First is essential before diving into its practical application. These principles are the foundation upon which you’ll build your profitable and sustainable creative business.
Pay Yourself First: One essential piece of Profit First is paying yourself. Traditional accounting methods often lead business owners to prioritize expenses, leaving profit and a paycheck as an afterthought. Profit First flips this approach by emphasizing that your business should exist to serve you, the owner. By allocating a percentage of your income to profit, you ensure that your business is designed to benefit you from the start.
Small Plates, Big Results: Profit First uses the metaphor of “small plates” to encourage disciplined spending. Just as eating off a smaller plate can help control your portions, dividing your income into smaller, designated accounts prevents excessive spending. Each account represents a specific financial need: profit, taxes, owner’s compensation, and operating expenses. This segmentation creates financial discipline, ensuring that you only spend what’s available in each account.
Regular Rhythm: Profit First introduces a regular rhythm to your finances. You’ll establish a routine, including designated days for allocating funds, reviewing your financial health, and making strategic decisions. This consistent rhythm helps you stay in control of your finances, preventing financial surprises or crises.
Profit Is Not an Event; It’s a Habit: Profit isn’t something that magically happens at the end of the year; it’s a habit that you cultivate throughout the year. By consistently setting aside profit and maintaining financial discipline, you ensure that your business generates sustainable profits with every sale.
As you internalize these core principles, you’ll be better prepared to implement Profit First effectively in your creative business. In the following chapters, we’ll delve into practical steps, providing you with a roadmap to transform your financial management and achieve long-term profitability.
Creative Income Cure – Profit First Course for Creatives
Creative Income Cure, Val’s Profit First for Creatives program is a game-changer for creative entrepreneurs and photographers looking to revolutionize their financial management. What sets Val’s program apart is its tailor-made approach for individuals in the creative industry. Val understands the unique challenges faced by creatives, and her program is designed to address these specific needs using the creative language.
In her program, you’ll gain access to a wealth of knowledge and resources derived from Val’s own experiences and expertise as a successful photographer. She covers every aspect of implementing Profit First in your creative business, from setting up your bank accounts to refining your percentages and achieving sustainable profit growth. You’ll also receive highly practical guidance on tackling common financial hurdles faced by creatives, such as managing irregular income and handling seasonality.
One of the standout features of Val’s program is the community of like-minded creatives it fosters. You’ll join a network of passionate photographers and creatives who are on the same journey towards financial empowerment. This community offers invaluable support, motivation, and a space to share your successes and challenges.
By enrolling in Val’s Creative Income Cure course, you’re not just gaining financial expertise; you’re becoming part of a thriving community that understands your unique needs and aspirations as a creative entrepreneur. If you’re ready to take control of your finances and pave the way for sustainable success in your creative business, Val’s program is your roadmap to financial freedom, growth and stability. Don’t miss this opportunity to transform your financial future and join a community of creatives dedicated to achieving their financial dreams.
Exclusive offer for the Creative Income Cure Course
Creative Income Cure is a Profit First backed online course + community for creatives so you can confidently manage your money, give yourself a raise and make the right financial decisions in your business. It’s a self-paced, online course that offers monthly coaching support and a community unlike any other.
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