Parkinson's Law
When given $1,000 to complete our work we get it done with $1,000 and when given $10,000 to complete the same work, it takes $10,000.
Profit First makes Parkinson’s Law an asset. By taking profit first the money available for expenses lessens, and we are forced to find ways to get the same things done for less money.
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The Primacy Effect
The GAAP (Generally Accepted Accounting Principles) formula for determining a business’s profit is Sales – Expenses = Profit. The formula, while logically accurate, does not account for human behaviour. In this formula profit is a "leftover", a "final consideration". Profit is rarely there and the business continues on its cheque to cheque survival.
Sales – Expenses = Profit
Sales – Profit = Expenses
Profit First practices flip the formula to Sales–Profit= Expenses. The math is the same, but your behaviour is radically different!
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