“It’s not about how much money you make, but how much you keep.” – Robert Kiyosaki
Most of us are familiar with the concept of ‘portion control’ in dieting – by using smaller plates, our brain is tricked into thinking we have enough food, leading us to consume less. But have you ever considered applying the same principle to your business finances?
Let’s look at an example using a fictional character, Emily, who owns a thriving digital marketing agency. She was often overwhelmed by the cash flow in her business – a lot of money coming in, but equally large amounts going out. To gain better control over her finances, Emily decided to ‘reduce her plate size’. Every time her agency received payment from a client, she immediately moved a portion of it into a separate ‘profit’ account, leaving a smaller ‘plate’ for expenses.
This approach compelled Emily to scrutinize her expenses, eliminate unnecessary ones, and innovate cost-effective solutions. Despite having less available cash for operations, her business thrived, becoming more efficient and profitable.
The principle of ‘smaller plates’ encourages frugality without sacrificing the quality of your services. By making do with less, you compel your business to become more innovative and efficient.
Action Step: This week, try shrinking your ‘financial plate’. When you receive income, set aside a portion for profit first and run your operations with the remaining funds.
This change may feel challenging initially, but it can lead to remarkable transformations in your business. It is a powerful tool to boost efficiency, profitability, and to create a more sustainable business model.
For those eager to learn more about this principle and its potential impact, I’d encourage you to read our book of the week “Profit First” by Mike Michalowicz.