2025: The Year Your Business Pays You Back

There’s no better way to spend the last day of the year reflecting on how to nurture our businesses for growth and success. Rethinking how you allocate profits could set you up for long-term success in 2025 and beyond.  

One piece of advice I often hear is to reinvest profits back into your business. While that can seem like a smart move at the time, there’s a more strategic approach worth considering— especially if your business is still in its early stages and you’re relying on other income sources to cover personal expenses.  

Start the Year with Intentional Profit Allocation 

Let’s take a closer look at the concept of reinvesting profits. When you pour every dollar back into your business, it can create a situation where your business becomes overly dependent on those funds.  

It’s a little like Parkinson’s Law: the more resources you have, the more you tend to use them up. Over time, profits can disappear, and your business may develop habits that assume those funds will always be there. 

But what happens when you’re ready to step away from a day job and rely solely on your business income? That’s when things get tricky.  

You might find yourself scrambling to adjust expenses and streamline operations just to make room for your salary or owner’s draw. And while you can absolutely make those adjustments later, wouldn’t it be better to build your business with that in mind from the start? 

A Smarter Way to Allocate Profits 

Instead of reinvesting all your profits, consider a proactive approach to profit allocation. From day one, set aside a portion of your profits for both personal and business needs. Doing this forces your business to operate within its means. It encourages creativity and problem-solving rather than defaulting to the “just spend more” mentality. 

This strategy isn’t just about saving for the future—it’s about cultivating a mindset of efficiency and resourcefulness. It prepares your business to thrive, even when times get tough, and ensures that you’re ready to take the leap when it’s time to rely on your business for income. 

Make Profit Allocation a Resolution 

Here’s a challenge for the new year: reserve a percentage of your profits in a separate bank account as if it were your salary. Over time, this habit will build a financial buffer, giving you peace of mind when it’s time to make your business your primary focus. 

Even better, by adopting this practice, you’ll naturally develop a business model that supports sustainable growth. For example, when it’s time to hire a new team member, you’ll already have funds set aside to cover payroll and onboarding costs. This kind of forward-thinking approach ensures your business stays financially healthy, even as it grows. 

Leverage Parkinson’s Law for Growth 

Allocating a portion of your profits to yourself isn’t selfish—it’s a growth strategy. By working within a set budget, your business will become more efficient and innovative. You’ll align with Parkinson’s Law, using resources wisely and driving sustainable development that’s built on a foundation of financial stability. 

As we step into 2025, take this opportunity to rethink how you allocate your profits. Start small but start now. The habits you create today will pave the way for a stronger, more profitable business a year from now. 

If you’re ready to take the next step but need a little guidance, the bookskeep team is ready to support you. Let’s make 2025 your best year yet—together. 

Reach out today and take the first step toward a thriving business. 

Interested in Profit First? 

If your ecommerce business isn’t where you’d like it to be in terms of profitability, check out my book, Profit First for Ecommerce Sellers. It answers important questions about how to implement Profit First in an ecommerce business. Take control of your money and your business, and put Profit First to work for you!  

You can also sign up for the Profit First for Ecommerce Sellers Online Course. As a Mastery Level, Certified Profit First Professional, I will teach you why Profit First works so well for ecommerce businesses and the particular challenges for businesses that have physical products requiring inventory management. You will learn how your behavior drives your money management habits for your business and how you can set up your business bank accounts to work with your habits. 

Check out all our ecommerce accounting and profit advising services here!