How Having Less Money Can Equal More Profit

What do time, toothpaste and money all have in common?

It may seem like a weird combination, but stick with me.

All these things can be linked by a concept called Parkinson’s Law. And we can use them to explain how to begin to transform your business into a successful, sustainable and profitable venture.

Parkinson's Law states that work expands so as to fill the time available for its completion.

So, if you have something that needs to be done, let’s say it’s your bookkeeping, but not until next week, then it’s highly likely that you may do a bit now, a bit tomorrow and perhaps some in a few days.. BUT, if you have a tax deadline and your accountant needs the information tomorrow or else you’ll have to pay a fine, then odds are you’ll get it done by tomorrow. Ergo, the time available is significantly less and you’ve completed the task pronto. Efficiency plus :-).

Parkinson's Law “Work expands so as to fill the time available for its completion”

The same goes for toothpaste. When you have a full tube of toothpaste you’re not worried about how much you squeeze out onto your toothbrush. Some might fall off, and you just go right ahead and squeeze more out. You have toothpaste to spare!!

But when we get near the end of the tube, what happens? We start to put a bit less toothpaste on. As we get closer and closer to the end we start to ration what we squeeze out, putting the bare minimum on the brush and begin to roll up the tube, twist it around, even cut the tube in half, in order to get the last little bit out.


So what does this have to do with profit?

These are both examples of how our behaviour changes based on what is available to us.

When we have less of something (i.e. time or toothpaste), we do two things.

Firstly, we become more frugal. When there’s less toothpaste available, we use less. We also tend to minimise distractions and only focus on essential tasks.

Secondly, we become more innovative and efficient in our approach to how we utilise our supply. So in our toothpaste example we find all sorts of ways to extract that last drop of toothpaste from its tube. With regards to a project we will seek to push ourselves to look for superior ways to get it done quicker.

And this is where the link with money and your business comes in.

You need to intentionally have less toothpaste (money) available to brush your teeth (operate your business).

When there is less, you will automatically run a tighter ship with your business and have more awareness when it comes to spending your money  (which is a good thing) and you’ll find you’re more innovative in the process (which is fantastic!).

Now, from a business perspective, I’m not saying we want to have less money coming in. BUT...if we change our approach so that we have less money available then we can begin to utilise the premise behind Parkinson’s Law and really transform our business.

Enter Profit First, which leverages these innate behaviours.  In its simplest terms, by taking your profit away and removing it from sight, you have less money available to run your business. This means you’ll find ways to get the same, or even better results, with less!

Ready to get started or want to find out more?

Book a free call with me and we can chat about the best way to move forward with your business finances and produce profit and results, depending on your stage of business.

Leave a Comment

Your email address will not be published. Required fields are marked *