Cultivating The Profit Frist Mindset

Cash Management System Every Small Business Owner Needs

Author

Lilit Petrosyan
May 21, 2025

“You eat the children of your savings. Then how do you expect them to work for you?”

That quote from The Richest Man in Babylon hits deep, doesn’t it?

Most business owners, including yours truly, say they want wealth, freedom, and long-term success. But every dollar that comes in is devoured by expenses, emergencies, or impulse decisions.

There’s nothing left to grow. Nothing left to multiply.

Many owners “eat the children” of their savings and then wonder why they’re still stuck.

It doesn’t have to be this way.

Let me walk you through a simple, actionable cash management system inspired by Profit First by Mike Michalowicz that ensures you protect your money, grow it, and pay yourself first.

Step 1: Open 5 Bank Accounts (Yes, Really)

Create the following:

  1. Income Account – Every payment from a client lands here first.

  2. Profit Account – This is your business’s baby-making account. Don’t touch it.

  3. Owner’s Pay Account – You work hard. You get paid.

  4. Tax Account – So the IRS doesn’t show up like an angry relative.

  5. Operating Expenses Account – This is where you cover your business costs.

Why? Because one bank account is a trap. You see money and you spend it. These accounts protect you from YOU.

Step 2: Allocate Money Like a Farmer

Just like a wise farmer sets aside seeds for next season, you need to set aside profits before you spend a single cent.

Every 10th and 25th of the month:

  • Take whatever’s in your Income Account.

  • Distribute it to the other four accounts using fixed percentages.

Here’s a smart starting formula:

  • Profit: 5%

  • Owner’s Pay: 50%

  • Tax: 15%

  • Operating Expenses: 30%

Why? These aren’t perfect numbers. They’re powerful habits.

Step 3: Starve the Impulse, Serve the Future

Pay ALL business expenses only from your Operating Expenses account.

If you don’t have enough to cover something? You don’t buy it. Simple.

Why? Protect your Profit account. Nurture your savings. Let the “children” of your savings grow, compound, and work for you.

Bonus 1: Action You Can Take Today Using AI

Use ChatGPT or Claude to create a Cash Allocation Tracker in Google Sheets.

Prompt:
🛠️ "Act as an experienced accountant. Create a Google Sheets table that helps me track Profit First allocations by percentage, with columns for each account, automatic formulas, and monthly summaries."

Why? You get a simple visual tool that makes your new system stick within seconds. No guesswork. No overwhelm.

Bonus 2. Starter Worksheet

Why? No more excuses. Start today!

Question for you:

Are you setting aside profit before anything else or are you eating the seeds you were meant to plant?

Let’s talk cash, systems, and energy in a way that supports the business and the business owner.