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Welcome to Profit First Nation, the podcast that helps you achieve permanent profitability in your business by taking action to implement Profit First right. Hosted by Danielle Mulvey, a Profit First expert, and Mike Michalowicz, the author of Profit First, this podcast is for the top 17% of entrepreneurs who have cash in the bank to correlate with their profitability.
On the podcast, we dive into advanced Profit First strategies by sharing the honest and authentic ups and downs of being a business owner. Each episode provides information for entrepreneurs focused on taking the right steps and seeking appropriate advice from professionals in accounting, legal, tax, or other relevant areas. You’ll also hear transformational stories from business owners who have turned their businesses from cash eating monsters to money making machines with cash in the bank to correlate to their profitability by implementing the Profit First System.
With a focus on intelligent entrepreneurship, Profit First Nation guides you on how to take ownership of your finances and leverage Profit First as a DIY cash management system to make your business permanently profitable.
If you're a fan of Profit First and Mike Michalowicz, this is the podcast for you. Join a in on our community of successful entrepreneurs driven to be permanently profitable, with a grit and growth mindset that lets no obstacle stand in the way in pursuit of the three Ps: passion, profit, and play.
https://www.profitfirstnation.com
ABOUT THE HOSTS
Danielle Mulvey:
Danielle Mulvey is a former flight attendant-turned entrepreneur and the owner of multiple businesses doing $50-million in annual revenue. She is one of the exclusive, select group of Mastery-Certified Profit First Professionals in the world, and the go-to “HOW TO IMPLEMENT” workshop facilitator for Profit First and WSJ Journal Best Selling Author Mike Michalowicz following his keynote speeches. Danielle is currently running multiple businesses from start-ups to mature businesses with 10-year plus track records and revenues ranging from $1M to $40-million in annual revenues and is a certified numbers geek about Profit First, leveraging the DIY cash management system for small business to achieve maximum profitability. She has the ability to personally guide business owners to achieve maximum profitability in their business based on her 25-years experience of being an entrepreneur who has been there and done that.
Additionally, Danielle authored the book The Rapid Read™ Guide to The 5-Star Employee Rating System™ and is currently collaborating with Wall Street Journal best-selling author Mike Michalowicz on his new book, to be released in Q1 2024, titled ALL IN: How Great Leaders Build Unstoppable Teams.
https://www.daniellemulvey.com
linkedin.com/in/danielle-mulvey-66a315
theallincompany.com
profitfirstnation.com
Mike Michalowicz:
Mike Michalowicz is an entrepreneur and New York Times and Wall Strett Journal best-selling author of Profit First, The Pumpkin Plan, SURGE, Toilet Paper Entrepreneur, Clockwork, Fix This Next, and Get Different. BusinessWeek called Toilet Paper Entrepreneur a business cult classic. His books have been translated into 10 languages and Mike has had the privilege to speak on stages all over the world because of his passion to connect with entrepreneurs.
As the founder of Profit First Professionals, he empowers accountants, bookkeepers, and business coaches with the tools and techniques to maximize client profitability, allowing them to uplevel from being one of the 83% of small businesses operating check-to-check and struggling to be profitabably to becoming one of the 17% of thriving and highly valuable businesses with cash in the bank to correlate to profitability. Mike also co-founded the business growth consultancy, Provendus Group, and has successfully founded, built, and sold two technology service-based companies. He is passionate about sharing his experiences and advice with entrepreneurs and sits on formal and informal advisory boards while maintaining relationships with angel and early-stage investors.
linkedin.com/in/mikemichalowicz
MikeMichalowicz.com
ProfitFirstProfessionals.com
mikemichalowicz.com/books/
MikeMichalowicz
Speaker: Welcome to Profit First Nation,
the official podcast for entrepreneurs
who are operating their businesses in
the zone of permanent profitability.
I'm Mike Michalowicz, the author of
Profit First, and now, here's your Profit
First Nation guide, Danielle Mulvey.
Danielle: All right.
Today I'd like to welcome a very
special guest to the podcast.
I'd like to welcome Kerrie Genes, who
is the CEO and founder of KFIT Body,
a women's only fitness and wellness
studio based on the east coast.
This month they're actually celebrating
their 15th year anniversary, and she is
here to share her Profit First journey.
So, welcome to the podcast, Kerrie.
Kerrie: Thank you so much.
Thank you for having me.
Danielle: So, let's talk about
how you came into the world of
Profit First and using it as a cash
management system in your business.
You've been in business for a while,
and you obviously had bookkeepers
and accountants helping you with
that, but you made a change in 2025.
Wanna talk us through that?
Kerrie: Yeah.
So funny little side story,
first, if I can tell you, because,
everything kind of came full circle.
I actually read Mike's book when
I first started KFIT 15 years ago.
I have the book right here.
I'll forever keep this book.
Oh,
Danielle: The Toilet Paper Entrepreneur.
Yes.
That's his very first book.
Kerrie: Yeah, so I read
it, I eared it at 30 pages.
That's when I stopped reading it and I
literally went out and opened my business.
It's what gave me the confidence to be
like, "Oh, heck yeah, I can do this."
And then five years into my
business, I read his Pumpkin Plan,
which also helped me at that phase.
And now 15 years in, you know, here
I am implementing Profit First.
So, it's a pretty full circle moment.
But to answer your question, what brought
me to it probably was the pandemic.
I.
I have to say I definitely had blinders
on when it came to the finances of
my business because I never really
took any type of business classes.
I certainly wasn't savvy in that aspect.
Not like I had a five-year business plan.
I started my gym as a side hustle,
and then, really, it just organically
grew, so I had to learn as I went
along and everything really was
kind of seamless, I would say.
Like I never had any massive investments.
The business already pretty much
paid for itself until I ended up
at my location now, where we went
through this huge expansion and
took out a good amount of debt.
And then, a couple years after that,
the pandemic hit, and everything
shifted for so many small businesses,
but specifically, the fitness world.
And just running a brick and mortar is so
much different now, in terms of the cost.
So it really forced me to
start to identify like where
we had leaks in the business.
And I had been working with an accountant,
and I remember our first year that we were
back to pre-pandemic numbers was 2024.
It took us four years to get back to that.
We had this profitable year, and I had
this amount that I was paying taxes on.
I was like, "Okay, so where's that money?
You know, where's that profit?"
Danielle: Right, right, right.
Let me just pause you right here.
So, your CPA does your taxes, you get
your prior year's financial, you see
a healthy bottom line and you're like,
Kerrie: Exactly.
Danielle: "Yes.
Amazing."
Kerrie: Yeah.
Danielle: And then he tells you, "And
now you owe probably tens of thousands
of dollars, if not more, in taxes."
And you're like, "Great,
where's that money?"
Kerrie: Yeah, exactly right.
And like where's the profit?
So, I just really started to look
into finding some help in terms of
understanding like the real dollars
and the real cash flow in the business.
Like what did those dollars mean?
And that was what led me to Kasey.
Danielle: So what happened was, you
realized that you just reinvested
the money into the business
when you had that profitable
2024 year, which is very common.
Cash comes in, and you see cash, and so
we've got cash to spend, so we spend it.
And were you operating, at
that time, on like one or two
business checking accounts?
Kerrie: Everything was one.
All of the dollars were
in the same account.
Danielle: Which is common, which
is what everyone does, for sure.
So,
Kerrie: uh, exactly.
Danielle: Okay, so that was 2024.
You get the taxes in 2025,
and you're starting to think,
"Maybe there's a better way to
see where the cash is going,"
and so you get on Google, right?
You start Googling and looking
for alternatives to your
accountant, and what did you find
out there in that big old world?
Kerrie: Yeah, that led me to Kasey,
and she is pretty local to my business.
Primarily an all women team.
So I always try to lean towards that.
I service all women and I think
just supporting that, local, fellow
women-owned businesses is important to me.
I really just liked her messaging
on her website really spoke
to what I was looking for.
I didn't know too much about the
Profit First model at that point, but
I initiated setting up a call with her.
Danielle: And so that's Kasey Anton, the
founder of Spark Business Consulting,
and she has clients nationwide.
She is a rockstar.
She's also the author of Profit First
for Restaurants, but services a lot of
industries with Spark Business Consulting.
So, you set up the call, and this is
kind of where it's now coming full circle
because you started with The Toilet Paper
Entrepreneur 15 years ago, and now it's
like, oh wait, Mike Michalowicz wrote
other books, including Profit First.
Yeah,
Kerrie: exactly.
So when she kind of sent me some homework,
and I think I was listening to it and
I was like, why is this so familiar?
And then I looked at the author
and I was like, oh my gosh.
So all the stars aligned that I
was in the right place for sure.
Danielle: Great, great.
So, when you met with Kasey
and decided to pull the trigger
and make the transition out of your
accountant, who I'm sure you worked
with for years, walk us through that
process and the moment she said,
"All right, Kerrie, you need to
open up at least four more checking
accounts at your primary bank."
Did you freak out when she said
it's time to open up more accounts?
Kerrie: Not really.
I mean, like I said, I had taken
the book in, and the concept
of just moving everything over.
'cause not only did I open up
accounts, I moved to another bank as
well, was just more of a heavy lift
of that process of moving all of
our, payment systems over to that.
But it really wasn't
that challenging at all.
It was pretty effortless.
Yeah.
Danielle: Yeah.
I mean, that's the first step
in Profit First is you have to
open up those bank accounts.
And a lot of times people are like, "Ugh.
I'd rather do 10 other things, 20
other things, than have to engage
my bank or maybe move banks, but
you gotta just tackle that fear and
you've gotta just run through it.
And if you run through it instead
of run against it, then you'll get
through it, and it's less painful than
you thought it was gonna be, right?
Right.
Kerrie: Exactly.
Just opening up accounts would've
been easy enough; moving everything
over was a whole different animal.
But at the same time, I wanted a bank
that was gonna be a lot easier to do
transactions from accounts to accounts.
And what I was using was
a little bit archaic.
So I would say that made it a little
bit easier too, because the system
I was moving towards made it so
much easier for me to manage all
of the dollars, versus my old bank.
I would say, also if while you're
gonna do the work, make sure that
you're also doing it with a bank that
makes the process a little bit easier.
Danielle: Yeah, that's a great
point, because you're on the
other side now, and it wasn't that
hard to get to the other side.
And how much happier are you on the
other side now, with your new bank?
Kerrie: Definitely.
Danielle: So well
Kerrie: worth
Danielle: it?
Yes.
Yes.
So, you guys, do not let the fear
of going to your bank, opening up
accounts, or moving your banking
relationship to another bank, keep
you from just not understanding how
the cash is working in your business.
If you're still operating with
your head buried in sand, when it
comes to the financials of your
business, get your butt to the bank.
Open up those accounts, and if
you need to move to another bank,
it's not that big of a deal.
It's not gonna take you months.
You can get through it quickly, but it's
all worth it when you make that move.
So, you started working with
Kasey, in November of 2025,
and kind of cleaned up some
things, in terms of your chart
of accounts and simplified some
things a little bit, I believe.
And you were ready to hit the
ground running, come January.
That was your official
start to implementing Profit
First in your business.
Kerrie: Yeah.
There was a little bit of
work that needed to be done.
Obviously, their systems were
different than my old accountant.
I feel like it definitely streamlined
things for me as the person who
doesn't have that financial lens.
You know, they, I don't wanna say
dumb things down a little bit,
but I guess that was the process.
They made it easier for me to
digest it, which was helpful.
And obviously setting up the
percentages and where I needed to be.
To me, being somebody who reaches for
those types of goals, just having that
visual goal made it so much easier for
me to understand, okay, I can change
this so that I can increase this by 2%.
So that was much more helpful.
Danielle: And I often see the chart
of accounts becomes overwhelming.
Mm-hmm.
There's just too much going on, and
there's too much noise, and there's
too many accounts, and categories.
It just becomes
tedious to look at.
When you kind of roll things up, and
you're looking at things in more of a
macro scale in terms of your chart of
accounts, it does make it easier to
consume, as the owner, and to keep a
pulse on the finances of your business.
So, you know.
Your chart of accounts, you gotta be
careful with that, but it is worth
it when you go to clean it up a bit.
It does take some effort,
but again, the bit of effort makes
the future so much easier, right?
So, you cleaned up your chart of accounts,
and then, Kasey and her team did the
instant assessment of how you ended 2025.
And then that gives you your
current allocation percentages.
And, I spoke to Kasey
before we met up here,
and she was like, "Hey, actually, Kerrie
had a very profitable business and
was doing really well and was actually
pretty close, if not really already
there in terms of her allocations."
Now, one thing that you didn't
have before was you were not
allocating to a tax account.
Kerrie: Correct, which was
Danielle: kind of the problem before
was you had the money, but you were
taking it as owner distributions and
maybe like a higher salary, et cetera.
But now those three servings of profit,
owners pay, and tax are three servings for
you, and before you were kind of taking
it out as one serving probably, and just
kind of like then spending that money.
But now you've got the clarity that
you've got profit, owners pay, and tax.
And now you know you'll be set for next
year now that you have that tax account.
Kerrie: Yeah, definitely.
I think, like I said, going through
the experience of 2020, it caused
me to really do a deep dive on our
expenses and all of those little things
that were like a million paper cuts.
I think that's why we landed in a
place where we were already operating
pretty good from like the goal of
our market on where we should be.
But I think, obviously a lot of
business, if they just have blinders
on, they're not seeing that, you know?
And then, to your point, even though I
was doing well, I still didn't have an
understanding on what that big, giant
bucket of money was in the account.
So when the taxes came up or the
end of the year, I could still be
sidelined by that because I'm having
to spend the money on taxes and not
knowing if there was enough money that
was gonna come in to replenish it.
So there's still that just area
of, uncertainty, even though I was
doing well, if that makes sense.
Danielle: Yeah, yeah.
There was just, there's a lot
of things that need to come
out of this one pile of cash.
Kerrie: Right,
Danielle: right.
and you're not thinking of percentages
either, but because Profit First is a
cash management system that is based on
percentages, it allows you to normalize
your cash flow and it allows you to start
allocating to taxes so that you have money
in there to pay your quarterly taxes when
those quarterly estimated taxes are due or
to reconcile the final taxes of the year.
You also brought up a great point that in
Profit First, you've got five accounts.
You've got the income account where
the money comes in, and then on your
designated allocation day, you allocate to
profit, owners pay, tax, and
then to operating expenses.
Now, you can add accounts if you want
subaccounts under operating expenses, et
cetera, but really, you had already done
a lot of the work, which is, again, why
you were successful coming out of the gate
of almost being at your target allocation
percentages was that you had already
done, and kept the discipline up, from
cutting those expenses down during COVID.
When people implement Profit
First, I mean, the money is just
seeping out of the business.
The businesses are successful.
They're making money, but it's
like, where's the cash going?
And obviously, the biggest bucket is
operating expenses, and that includes
payroll, and that includes, maybe
having some inefficient employees.
That includes having subscriptions
that you're not even using
those services anymore.
So it is important to stay on top of that.
And you probably don't remember the
percentage, but when I see people do a
good audit of their operating expenses,
I mean, they're cutting 10, 20, I've
seen 30, 35% get cut in operating
expenses, that just is like, you don't
have to spend money to make money,
people.
Kerrie: Yeah.
Right, right.
Yeah.
And just having that goal, like I said,
'cause even for us right now, we have a
goal to decrease our opex a little bit.
So, understanding what that goal is just
allows me to go in and look at, "Okay,
where are we leaking a little bit?"
or "Where are we
overspending a little bit?"
Whereas in the past, I guess I was just
shooting from the hip a little bit.
But this allows you to be
more savvy with those cuts.
Danielle: Yeah.
And you can see like, "Hey, we've got
this much to spend in operating expenses."
Kerrie: Mm-hmm.
Danielle: And it's sort of like, well,
right now we're allocating, and I'm
just gonna make up numbers here just for
the audience, but let's just say you're
allocating 50% to operating expenses.
It's like, if you can skinny that
allocation down to 45%, well,
then where does that other 5% go?
Well, Kerrie, you can give yourself a
raise and increase your owner's pay.
You can Increase a couple
percentage points going to profit.
Or maybe you're not quite there
in the tax allocation and you need
to increase, the tax allocation.
So again, by working with these
percentages, you really are normalizing
your cash flow, but you're also
seeing where the opportunity is.
And I know that you're very competitive,
and I know that you like to set goals
and achieve those goals, so just like you
said, it's like, "Hey, now I see if it's
50% operating expenses, what does it look?
I can do 45%."
Exactly.
And that extra 5% goes into
those three servings for you.
So, that's the fun part of Profit First.
But you gotta open those
bank accounts first, people.
You can't have the fun until
you open up those bank accounts.
But that is the easy, easy part.
And then just make that first step.
And at least if you're allocating 1% to
profit, listeners, out there, you'll start
to build that muscle and you'll start to
be profitable.
Just allocating even 1% to
profit will make you profitable.
So, what would your advice be to a fellow
business owner who has been in business
for a while, read some business books, has
a good accountant who puts the things in
the boxes and has compliant financials,
but just kind of reconciles the
month and says, "Here are your
reports," and leaves you to yourself.
What would be your advice to the
listeners out there who were like
you, you know, kind of a year ago?
Kerrie: Yeah, I think.
I mean, just definitely invest the time
to do it because there's something that is
more on like a subconscious mental level
as well in terms with how it's organized.
Because again, you just have a deeper
understanding on what every dollar is
doing in your business, and because
of that, we've been able to like 3X
what our profit is and owner's pay is
because the dollars are being managed
and I'm not just guessing, oh, you
know, we're gonna buy this because
the gym needs it, or I'm gonna add
this role because the gym needs it.
I'm really making decisions that are
aligned with our percentage goals.
A good example of this, for this
year in particular, we really
got hit with a huge cam bill this
year, like the biggest we've had.
Oh,
Danielle: okay.
So based off of your lease.
So, she said cam bill.
That is when you have a lease
and your property owner,
says, "Hey, time to pony up."
Kerrie: Yeah.
Time to pony up is for real.
Um, but so that also increased.
Now we have an adjustment for this year.
So I feel like, two years
ago, even though we're finally
profitable, I would've panicked.
I would've been like, "Are we gonna
be able to handle this $2,000 swing
up in our rent out of nowhere?"
And having one money in
the bank from our profits?
I'm just letting that sit there.
I know, okay, we have reserve
that we can handle that.
But then also, what does that
look like to adjust, to make room
for that new operating expense?
There's just those tweaks that you're
able to make live with your team or your
accountant that just changes the
game plan and keeps you in control,
and also keeps your nervous
system a little bit less taxed.
Danielle: Yeah.
And I bet going forward you're
gonna have a new account called
CAM that you're allocating a small
percentage to that is just going
to accumulate and build over time.
So.
That the next time the cam
bill comes, it's already there.
It's just waiting.
Kerrie: Exactly.
Exactly.
Danielle: So, I think maybe, can we talk
just a little bit about the difference of
working with an accountant or bookkeeper
who just gives you your reports,
checks the boxes, puts things in the
right boxes, and says, "Here you go,"
but doesn't provide any consultation.
So, you went from that, which is, I say
90% of bookkeepers and accountants out
there for small business, and then you
went to a Certified Profit Professional.
You went to Kasey and her team
at Spark Business Consulting.
What has that been like?
Kerrie: Yeah, I mean, I feel
like it obviously has been
transformative for the business,
but it feels more of like a live
relationship, because there's that
deeper understanding when they're
making that analysis month to month.
So if something seems off or out
of the ordinary, I am much more
aware of it because we're working
cohesively like constantly.
So that I think has been the biggest
game changer because you can course
correct really quickly instead
of it being like, "Hey, it's tax
time and this is what it's looking
like," and you're like, "Okay, cool.
I was not prepared for that."
So that I feel like has been,
yeah, really just a game changer.
Danielle: To have people who care
and people who will provide some
consultative, Heads up to you and
you're not just going this alone.
Because again, most of these
relationships with bookkeepers and
accountants, it's just kind of like
very transactional, like mm-hmm.
You pay them to reconcile your
accounts and send you your
financials, and that's about it.
They're not gonna give you warning signs.
They're not gonna point out the red flags.
That's the business owner's job.
So when you have financial and accounting
and bookkeeping professionals that have
your back and want to be consultative
with you, then you're not alone anymore,
right?
And kind of makes it more fun.
Kerrie: Yeah.
And all those goals are like
little benchmarks, right?
So to your point, they're flagging it.
If something is going off, it's like, "Oh,
wow, we were at, you know, whatever, 20%
profit margin, and this month it's 10."
There's just so much more
interaction in the business that way.
Danielle: That's great.
Excellent.
So, amazing.
Congratulations on
implementing Profit First.
Mike has other books too.
So, maybe you wanna read ALL IN next.
Kerrie: Okay.
Danielle: Yeah.
Kerrie: Put it on my list.
Danielle: Okay.
Here we go.
ALL IN.
But thank you so much
for joining us, Kerrie.
And if you would like to work
with Kasey and her team at Spark
Business Consulting, you can find
them at sparkbusinessconsulting.com
or you can work with another
certified Profit First Professional
by going to profitfirstnation.com
and clicking on contact.
Thank you so much for joining us
and cheers to another profitable
day, my entrepreneurial friends.