Tips for Implementing the Profit First Principle in Your Boutique Clothing Store

Also called the ‘Profit First method,’ this philosophy has helped business owners increase their growth rapidly in a wide range of sectors. Here, we’ll talk you through how the Profit First principle can dramatically help boutique clothing store owners – and we’ll offer some tips for implementing Profit First ideas.

What is the Profit First Principle?

The Profit First principle is a financial management idea based on a bestselling book, Profit First, by business writer Mike Michalowicz.

The book suggested that business owners should focus more on paying themselves first (meaning they should focus more on the profit aspect of the business) rather than simply taking away expenses to determine a business owner’s actual profit. The general idea is to allocate a percentage of your income to profit before you start thinking about expenses.

While there are no set rules about how a business can actually follow the Profit First Principle, the idea is that companies should focus on a mindset of profitability and growth, rather than on a mindset of just making enough to get by, with no focus on the profitable rewards.

Why Should Boutique Clothing Store Owners Implement the Profit First Principle?

Boutique clothing store owners often have a lot of overheads and expenses to worry about, including stock, store upkeep, supply & delivery, and online maintenance. With that in mind, those in the retail clothing industry can sometimes forget to put themselves first.

This is an oversight, considering that the fashion industry is very profitable, and boutique stores can find many ways to earn themselves the healthy returns they deserve.

The Profit First Principle encourages boutique store owners to be more ambitious in this business outlook and more forthright when it comes to getting the profits they deserve.

As a wholesale women’s clothing website, Dear Lover benefits from offering tips to boutique store owners on how to put profit first.

Here are some of our top tips:

1.    Put Your Boutique Store Business Income Into Categories

First, divide your boutique store income into distinct categories, such as profit, expenses, taxes, etc. This way, you’ll have a firm idea of what profit you’re giving yourself at the moment. From this, you can work out how you might better prioritize profits.

2.    Pay Yourself!

As soon as your income comes in, pay yourself first and take this payment as your ‘profit.’ The whole point of the Profit First Principle is to reward and empower you, as well as simplify your business and financial outlook. Pay yourself, then continue to work towards growing your boutique store.

3.    Consider How to Lower Expenses

Once you adopt the Profit First Principle, it will change your mindset in terms of the expenses your business will have. If you’re a boutique store owner, you’ll likely purchase inventory from wholesaler websites like Dear Lover’s. You’ll be able to search through new items, the latest trends, and discounts/special offers – based on the mindset of prioritizing your profit. This will undoubtedly help your business flourish.

4.    Keep An Eye On Your Finances

It will no doubt be obvious to most business owners, but it is essential to track your finances. It is also important to review your current strategies regularly, to make sure that the ideas you’ve adopted are working for you.