Angie Noll, the Owner of Reconciled Solutions, is a Certified Profit First Advisor with an MBA from Loyola (Chicago). She advocates for a shift in accounting principles proposed by Mike Michalowicz’s book Profit First, which suggests that the formula for profitability should be the opposite of what is traditionally followed. Instead of Sales minus expenses equals profit, Michalowicz argues for Sales minus profit equals expenses. Noll helps businesses implement this new approach to set themselves up for permanent profitability.
In order to achieve permanent profitability, small business owners need to ask themselves a series of questions. First, they should reverse-engineer how much they need to sell to support their lifestyle in a concept known as “lifestyle congruence.” This involves understanding how sales, expenses, and profit are interconnected to support personal financial goals. They should also be able to identify how much they are paying themselves and measure the results of their spending to ensure a return on investment.
Additionally, financials should tell a clear and accurate story of the business, with clean and organized records that accurately represent income, expenses, and profitability. Leveraged spending should be measured and accounted for in a way that ensures a predictable outcome and return on investment. It is important that every dollar spent in the business has a purpose and place, and that proper financial goals and plans are in place to achieve them.
Technical proficiency in accounting software is crucial to ensure accurate financial reporting. The software should be synced properly with the accounting system to avoid errors and discrepancies. Timely financial reports are essential for making informed decisions, and trusting the numbers and processes in place is crucial for successful financial management. Having a close relationship with a bookkeeper who understands the business goals and values is also important for long-term success.
To avoid business failure, it is essential to manage financials effectively with an accounting system that promotes success. Access to regular reviews and adjustments, as well as a focus on profit, are key components of a successful financial management strategy. It is recommended to consult with licensed professionals for specific financial advice tailored to individual circumstances. Angie Noll’s expertise in Profit First principles and financial management makes her a valuable resource for businesses looking to improve their profitability and success.
