Intentional Conversations: Building Profitable Businesses with Dr. Nika White and Susanne Mariga
This vodcast episode of "Intentional Conversations" featured Dr. Nika White and Susanne Mariga discussing strategies for building profitable and resilient businesses, especially for entrepreneurs of color. Mariga, a CPA and Profit First specialist, shared her experiences witnessing entrepreneurs struggle to make ends meet despite working long hours. She attributed this to traditional accounting methods that prioritize revenue over profit.
Key Points:
- Legacy and Resilience: Dr. White opens the conversation by highlighting the importance of building legacies and resilient businesses, especially for marginalized communities.
- Challenges Faced by Entrepreneurs: Susanne Mariga, a CPA and Profit First specialist, shares her experience witnessing entrepreneurs struggle to make ends meet despite working long hours. She attributes this to traditional accounting methods that prioritize revenue over profit.
- The Flawed Traditional Equation: Mariga criticizes the equation "Revenue - Expenses = Profit" for encouraging entrepreneurs to focus on sales and drop prices, often leading to unsustainable practices.
- Profit First Methodology: Mariga introduces the Profit First system, which flips the script. Instead of waiting for profit after expenses, entrepreneurs allocate a percentage of income to separate accounts for profit, owner's pay, taxes, and operating expenses. This approach encourages intentional cash management and prioritizes profitability.
- Psychological and Biological Influences: Mariga highlights the psychological and biological factors that contribute to business failure. Parkinson's Law, which states that work expands to fill the time available, is used as an example. When cash is plentiful, entrepreneurs may be more likely to overspend.
- Profit First Creates Scarcity: By allocating funds to specific accounts, Profit First creates a sense of scarcity for operating expenses. This encourages entrepreneurs to be more mindful of spending.
- Financial Strategies for Success: Mariga emphasizes the importance of choosing the right business model, considering scalability, and seeking professional accounting advice.
- Building Wealth While Minimizing Taxes: Strategies are discussed for minimizing taxes while maximizing wealth, such as maximizing 401k contributions and offering employee benefits with vesting periods.
- Profit First Resources: Mariga mentions ProfitMap.co as a resource for downloading charts with suggested profit allocation percentages based on revenue category.
Overall, the conversation highlights the importance of intentional financial management for entrepreneurs, particularly the Profit First methodology. By prioritizing profit and aligning spending with business goals, entrepreneurs can build more resilient and successful businesses.
Intentional Conversations is a weekly vodcast/podcast brought to you by Nika White Consulting that intersects dialogue of diversity, equity, and inclusion with leadership and business. Click here to register to attend the live sessions each Friday, 11 am to 12 noon EST. You may also search archives to view replays of past episodes, or you can listen to the Intentional Conversations Podcast on your favorite platform.




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