There’s a great book called “Profits First” by Mike Michalowicz. Another book we recommend is “You Need a Budget” by Jesse Mecham.

The methods these two people talk about are ones that anybody can do. And it’ll make a difference. We’re experts in a lot of things – Facebook marketing, Google Ads, Podcasts. But when it comes to financing, we’re a lot like everybody else.

We found a couple of great resources and want to talk about them with you. They struck a chord with us.

So often we hear about people who run their business part-time and are not able to pay themselves. Or they need to make a big order of ink and they don’t have the funds on hand.

You might also be working 40-60 hours a week and have a successful business. But, after you’ve paid your salary and your taxes you don’t have anything left in the bank to show for it.

Why read a finance book?

If you’re willing to pick up a book on finance, you’re going to help yourself to get better.

Whatever book you pick up you may find some things that you don’t think will work for you. While other things will reflect back and really stand out.

The more you learn about it, the easier it’ll be to put together a plan that will make your business better.

The idea is that you’re always getting better. Just like in your custom apparel business. You’re continually getting better at vinyl or embroidery.

Apply that same passion and effort into your business. Understand sales, marketing, finance, etc. When you understand those things they become fun and interesting.

The goal of any business is profit

Profit is the money that’s left over after everything. It’s after you pay yourself, your expenses, and your taxes.

The goal of finances at a very high level is that you’re not stressing about money. The money that you bring in is doing the things you want.


How not to do finance

So many businesses don’t look at their bank account every day. When it comes to bills, they’re using whatever card has some money on it.

Others have one singular account that everything goes into and comes out of until the account is back down to zero.

If you see all this money in a single bank account then you’re going to spend it. The Profit First method is to divide up your money into different bank accounts. You’ll be able to allocate your money better.

Multiple Accounts

What are the 5 accounts you should have?


All the checks from customers go into the main account. From there you allocate out.

First, you put some into the Profits account and it’s now untouchable.

Then you put your 20% into the Taxes account so there are no surprises at tax time.

Compensation is your personal paycheck.

As a custom apparel business, there is no “normal” month. You can’t expect to make the same this month as you did last month. This is one of the things talked about in “You Need a Budget”.

That also means the expenses that you have each month are going to vary. And Michalowicz says that he’s never been in a business that couldn’t reduce its expenses by 10%.

If you look at your expenses and wanted to knock 10% off there’s something there you can get rid of. Perhaps it’s a software subscription or a newspaper ad that’s not bringing in customers.

Splitting up the money into different accounts can help you budget.

Example: you see something that you want to buy, but that’s not a necessity. You look at the Operating Expenses account and you don’t have the money in there for it. Do you really want to dip into your profits or personal pay to get that item?

Once you start to watch closely where the money is going, you’re going to start to automatically save some money.

Going a step further

There are actually two other accounts that you’ll want to set up as well.


You go to a different bank – finding the least convenient bank to put this money into. The money that comes into these accounts is coming from the original Profit and Tax accounts.

It now becomes physically difficult to touch that money.

You’re making a commitment when you put profit first to actually make sure there is profit in your business.

On your way to making a profit

You’re not selling shirts with a $2 profit. You’re making sure there’s enough to pay yourself an hourly wage or salary.

Your business has to be on the way to being a profitable business and you have to look at it that way.


You determine what percentage has to go to profits. What percentage is taxes. What percentage are wages. Whatever’s left is your operating expenses.

Paying yourself first

A lot of businesses who fail, do not take into account the wage they need to pay themselves. Many embroiders price their product so that they’re making $50/hour.

That’s not their personal hourly wage though. They’re taking $50/hour in revenues. That revenue is on top of the blanks and supplies. But is to pay out the other expenses, their taxes, their profits, and their wage.

You need to budget out to pay yourself. If you hired someone to do your job what is that worth? $15/hour or $25/hour?

What if you decide to expand or take on a different role in the business? You need to be able to pay someone else a decent wage to now make the custom apparel. If you haven’t been paying yourself, how can you pay someone else?

Instant assessment

In the book “Profits First: there is an instant assessment. We encourage you to plug your business numbers in.

This analysis will give you an idea of how well or bad your business does. Know your numbers to get from where you are to grow your business.

Living on next month’s income

Too many businesses are operating on next month’s income. They use a business credit card to pay for things, with the knowledge that they have jobs next month that will cover those costs.

You’re setting yourself up for a possible failure. That’s when you hear about a small business t-shirt heat press owner where everything was going great and then they’ve gone bankrupt or are struggling.

What if you buy the supplies for that big customer, then get another big customer and buy their supplies. But one of those customers disappears and doesn’t pay.

Now you owe $10,000 and you don’t have it.

Overcoming failure

With finances, the first step to overcoming these hurdles is to admit you have a problem.

Now you’ve decided to not only pay yourself but set aside money for profit.

To be continued in Part Two.

Have a good business.