Mark looked at the bank balance and felt sick. 

The account showed $87,000, but he certainly didn't feel like he had $87,000.. 

"Where does it all go?" he asked Tessa for the hundredth time, while scratching his head. 

She'd been asking herself the same thing. They'd had a busy quarter. Jobs came in, and the money came in, but when she looked at what was available, nothing added up. 

Some of it was for tax. Some was sitting there for a vehicle payment. Some was probably for materials on the next job. And none of it was in their control. 

That's when she learned about Profit First. Not as a mindset shift, but as a practical system. 

It's a bank account structure. It sounds boring, but it changed everything. 

Here's how it works. 

THE PROBLEM 

Most tradies run one account (or maybe two). 

Money comes in. You spend what you need to. At the end of the month you hope there's something left for tax, for profit, for you. 

Usually there isn't; or there is, but you've already spent it on something else because it was all sitting in the same place. 

Then you end up with a business that makes money on paper but never feels like it makes money in reality - and every time the ATO bill hits or you need to buy equipment, it feels like an emergency instead of something you planned for. 

Profit First fixes this. 

THE PROFIT FIRST STRUCTURE 

It's five accounts. Each one has a job. Once you understand the jobs, the whole thing makes sense. 

1. INCOME ACCOUNT 

This is where everything lands first. Every invoice you send. Every payment that comes in. 

It's temporary. Money doesn't stay here. 

2. TAX ACCOUNT 

The moment money lands in income, a percentage gets moved here. 

Not when the bill's due.. Now. 

For most tradies, this is about 25-30% of what comes in (tax + super + GST, depending on your structure). 

The money sits here. Untouched. When the ATO bill hits in 6 months, it's already there. 

No panic or scrambling at the end of the quarter. 

3. OPERATING EXPENSES ACCOUNT 

This is what the business needs to run. 

Materials. Fuel. Tools. Equipment hire. Phone bill. Insurance. All of it comes out of here. 

You transfer what you expect to need for the month and that's your operating budget. 

4. PROFIT ACCOUNT 

This is yours (not the leftovers). Actual profit, set aside before anything else happens. 

Most businesses start at 1-5% of revenue. You decide. 

Money goes here every time income comes in. It sits here until you decide what to do with it - reinvest it, take it as a bonus, build a buffer. 

5. OWNER'S PAY ACCOUNT 

This is your salary. Your regular take-home. 

You decide the amount. You pay yourself on a set day (weekly, fortnightly, whatever works). That's your paycheck, separate from the business. 

HOW THE MONEY FLOWS 

Income comes in → 100% lands in Income account 

Then (usually weekly, when you do your reconciliation): 

• 25-30% moves to Tax 

• 50-60% moves to Operating Expenses 

• 1-5% moves to Profit 

• Remainder moves to Owner's Pay 

Done. 

Now every dollar has a job. You know what's available for spending on the business. You know what's set aside for tax. You know what's actually profit. 

And best of all - you know exactly what you're paying yourself. 

WHY THIS MATTERS FOR TRADIES 

Construction, plumbing, electrical work - it's all variable income. 

Some months are busy. Some are quiet. Jobs finish and then there's a gap before the next one starts. 

Without Profit First, the quiet months feel catastrophic. You think you've got no money because you spent the busy month's money on something. 

With Profit First, you know: 

• Tax is already set aside (no bill shocks) 

• Operating budget is separate (you know what you can spend) 

• Profit is protected (it's not available for emergencies) 

• Your pay is consistent (even in quiet months) 

You're not managing by panic. You're managing by plan. 

GETTING IT SET UP 

You need one main bank account and five sub-accounts (or "pockets" if your bank calls them that). 

Most Australian banks can do this. If yours can't, it's worth switching. 

Once they're set up: 

1. Open all five accounts 

1. Label them clearly (Income, Tax, Operating Expenses, Profit, Owner's Pay) 

1. Work out your percentages (talk to your accountant about the tax number - it depends on your structure) 

1. Set up a weekly rhythm to allocate money 

The hard part isn't the setup. It's sticking with it. 

THE QUESTION MARK 

Mark had made $500k the previous year. On paper, that looked massive, but he had no idea how much was profit. 

Some of it went to tax (he hoped). Some went to a vehicle loan. Some went to materials and fuel. Some he'd paid himself. The rest was sitting in the account, earmarked for things he'd forgotten about. 

Once they set up Profit First, the answer became clear. 

Profit for the year was about $60k. Not nothing, and nowhere near what he thought. 

Now he knew, and now he could plan. 

GETTING STARTED 

Setting up Profit First isn't complicated, but doing it right - working out the right percentages for your business, actually sticking to the system - is easier with someone walking you through it. 

That's where hands-on guidance makes the difference. 

Every week in the Unexpected Bookkeeper co-working sessions, members are setting up, reviewing or tweaking, their Profit First accounts. Step by step, with questions answered as they come up. 

If you want to do it properly, that's where to start, and it's not too late to join us. 

Disclaimer: This information is general in nature and doesn't take your personal circumstances into account. Always seek professional advice for your specific situation.