Profit First Explained: Your Questions Answered

Discover proven strategies to improve restaurant profitability

One of the questions we get asked every single day is “So… What IS Profit First?”. Here's our handy Q&A explaining everything you need to know about implementing Profit First into your hospitality business.

Q: What exactly is Profit First?

Profit First is a cash management system that flips the traditional accounting formula.

Instead of:

Sales – Expenses = Profit

It works like this:

Sales – Profit = Expenses

It’s a simple shift, but a powerful one. By setting profit aside first, you run your business on what’s left - meaning you’re always profitable, not just on paper at year-end.

Q: Why doesn’t traditional accounting work for most hospitality businesses?

Traditional accounting reports tend to be backward-looking, a snapshot of the past. They’re complex and often designed for large corporations, not independent venues. They also tend to focus on compliance, rather than day-to-day clarity.

Most restaurant or bar owners don’t sit down with balance sheets daily. But they do check their bank account. Profit First uses that natural behaviour by giving you a clear view of your finances in real time.

Q: How does Profit First work in practice?

You divide your income into separate bank accounts, each with a clear purpose:

• Profit

• VAT/Tax

• Owner’s Pay

• Staff Pay

• Operating Expenses

• Some hospitality businesses also add a Supplier Account.

Every pound that comes in is allocated across these accounts. This makes it obvious if you’re overspending in one area — long before payroll or tax deadlines catch you off guard.

Q: Will Profit First help if my restaurant is already in debt?

Yes. In fact, Profit First is especially helpful for businesses carrying debt. Chasing sales or refinancing might provide temporary relief, but unless you fix the cash management problem, you’ll end up in the same position.

Profit First ensures you stay profitable from today, even while paying down debt, so you stop the cycle of running out of cash.

Q: Will Profit First make me rich overnight?

No - and it’s not designed to. Profit First isn’t a get-rich-quick scheme. It’s a system that:

• Creates consistent profit

• Reduces financial stress

• Helps you pay yourself properly as an owner

• Builds long-term sustainability

You won’t wake up wealthy tomorrow, but you will start seeing profit in your bank accounts immediately.

Q: What are the main benefits for hospitality businesses?

• Clarity – you know where you stand financially just by checking your bank.

• Confidence – no nasty surprises when VAT or wages are due.

• Consistency – owner’s pay and profit become non-negotiable.

• Control – you stop chasing sales and start managing what you have effectively.

Q: Where can I get help implementing Profit First?

That’s where we come in. At Profit First Hospitality, we specialise in adapting the system for restaurants, bars, and hospitality businesses across the UK.

Want to see how Profit First could transform your business? Get in touch and we’ll show you how to take back control of your cash flow.