So you’re feeling pretty comfortable with managing your five Profit First accounts — Income, Profit, Owner’s Compensation, Tax and Operating Expenses. That is what we call the basic method of Profit First. Congratulations! You’ve now graduated to the advanced method, which includes some additional accounts including a Drip account, and it just so happens that January is a great time to open one.

January is one of those months when some gyms and fitness centers are crowded with resolution-makers and those trying to sweat off the weight that was gained over the holidays. That’s a business boon and a great time to take advantage of increased revenue. Since it is not needed to cover expenses, these extra earnings can be squirreled away for the proverbial rainy day when revenue is down. Money can then be pulled from the Drip account in those slower months to make up the difference.

This advanced method of Profit First is truly the superior approach to managing your cash flow. Once you are in the habit of accumulating and allocating to and from your accounts, you’ll be able to see clearly what money is available for what purpose and use it to your best advantage.

As always, if you have any questions about Drip accounts or any of the Profit First system, please don’t hesitate to reach out.

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