A Tale of Profit First Success

We love “transformonials ” – especially from those who have implemented Profit First. So when Sherri Tafoya, President and Founder of Customs Blinds & Design contacted us, saying she blasted through her revenue goal – in 2020, no less, we asked her to share her experience and she graciously obliged. We could not be happier for Sherri and her success, and hope that by sharing her story, you will feel empowered to implement the Profit First system if you haven’t already. Take it away, Sherri!

“I Founded Custom Blinds For Less, Inc. in February 2000 – part time, with the goal to quit my full-time job within one year.  I just wanted to clear $500 a week to work from home, overseeing my 4 boys, ages 6-15 at the time.  No money down as I didn’t have any. By the end of December, 2000 I had sold over $100,000 in Hunter Douglas shadings, through my company, Custom Blinds for Less, Inc. –  as business progressed from my “shop at home”, model, I stepped out in faith- and opened a Hunter Douglas trademark Gallery Store in Lincoln 2005- then a second Gallery Store in Omaha, 2008.  

Fast forward to 2020 

We kicked in 2020 with outstanding sales. (Our company goal for 2020 was set at $4.1 million) Yet, I recall the inner struggle I had, as I kept repeating to my closest accountability partners, “something is in the wind, I just feel like something is not right”. 

In late February, I met with my banker, Dave Shiffermiller, with Cornhusker Bank. Our business was  experiencing record sales, yet, I was out of cash, out of line of credit, and I still had a loan on the business, along with payroll to meet, invoices to pay, etc. We opened my balance sheet together, and Dave said “Sherri, it looks like you are running just ahead of your sales. If you were to close your doors tomorrow, you might end up just about even, by the time we collect all the receivables, and pay all your payable, notes, etc”.  

I was shocked at this review, as we were starting our 20 years in business celebration. I started this in business part-time, in 2000, loaded with a prayer and a fully stocked min-van. I went from zero dollars in 2000 when I stocked my van with samples, to finishing out 2019 with $3.8 million in sales, 2 showrooms, and 18 employees. I asked my banker” how I can turn this business around”? Now it was less about me and more about the 18 families I support, along with our ½ dozen sub-contractors. He asked me “have you heard about the book, “Profit First”?” Nope, never heard about it, but it was on my Audible read by the end of the day. I jumped right into the book, and when I got to the part about “bank account balance” accounting,   I recall thinking- “Is this guy in my back seat??!!”, as this was exactly how I was running my books!    I let the line of credit pick up the monthly sales tax of $30,000 plus or minus, as well as payroll, invoices, with the “cushion” of my line of credit.  Everything ran out of the same account.   I had a $100,000 loan on the business, and my line of credit was maxed at $175,000.    

I did not waste time in setting up the core accounts! I filled out the Profit First financial status form, and I was further dismayed by the poor health of my business. I immediately figured my percentages of expense and started posting weekly (not 15th an 25th) percentages to each category. I started the profit calculation at 1%–(Ended the year at 3%)- Frankly, I was so passionate about the Profit First concept, that I couldn’t wait until the end of the week when I could portion out my cash receipts to the appropriate bank accounts. I set up a Sales tax account, and invoice account, and a payroll account, among the other recommendations by the book.   I follow a strict budget and portion the fund percentage allotment each week. I keep a running Excel sheet to match up to my Quickbooks budget for 2021. (We finished well ahead of our lean Quickbooks budget!)     

Fast forward to December 31, 2020 –   I stayed on course. I paid off my loan and my line of credit before mid year. I paid cash for an added service vehicle. I have no credit card debt. I have 3% saved to my Profit First account (8% if you consider gross profit dollars vs. gross revenue).  I have over $160,000 in Profit first accounts as of December 31!  I’ve stayed true to the Profit First system overall. Next year, my goal is to start with 4% of all cash (minus sales tax) to move to Profit First account. Once I see that I can keep up with that, I plan to graduate to 5% for the second half of the year.   

I want to dig in deeper with 3 months of cash stored away – “Vault” money-   I need to dig deeper into the book to figure out how to do this- yet keep paying myself “Profit First”-! 

However, I now know my balance sheet. It’s the easiest, cleanest read since I can’t remember when. Today, I am writing myself a check for $110,000, out of my Profit hold, and moving it to the other bank.   I have $32,000 saved to pay taxes. I have an account for Sales tax, Invoices, and of course, PROFIT!   Each week, I can’t wait until the weekend so I can move the funds to each appropriated account.    

For 2020, we blasted through our 2020 goal by October 31- and we’ve since exceeded our annual revenue goal we projected through 2023 surpassing $5 million dollars in sales! What??!!! We sell a luxury product. How can this be in this pandemic crazy world of 2020?     

For 2021 –   Who knows what this crazy world situation will bring forward. Our company will remain diligent and focused on Profit First-  taking one day at a time.”

We cannot thank you enough Sherri! Thank you for putting it all out there so others can learn from your awesome experience!

If you would like to share your own success, post it in the comments or email us (jenna@mikemichalowicz.com) to be featured on our blog and social media.

 

Comments

1 thought on “A Tale of Profit First Success”

  1. Since May 2020.
    1. Paid off six credit six credit cards.
    2. Saving 10% to my Profit First account
    3. Created POM Fund of $1000
    4. Able to pay my taxes with my Government money account.
    All this when income shrinked for gig workers in the pandemic. Thx

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