When Growth Becomes a Trap
It’s one of the biggest paradoxes in business: companies can grow rapidly, boost sales year after year, and still end up bankrupt. In this episode of Building the Premier Accounting Firm, host Roger Knecht sits down with Ron Saharyan, Co-Founder and Managing Director of Profit First Professionals, to unpack why this happens and how to stop it.
The discussion reveals a hard truth: growth doesn’t equal profitability. Many entrepreneurs chase higher revenue but neglect the one thing that keeps a business alive, profit. As Roger explains, “There are so many companies listed among the fastest-growing businesses that don’t come back the next year, not because they didn’t grow, but because they went out of business. They weren’t profitable.”
Meet the Guest: Ron Saharyan, Co-Founder of Profit First Professionals
Ron Saharyan has dedicated his career to helping entrepreneurs “eradicate entrepreneurial poverty.” As the Co-Founder of Profit First Professionals, Ron has spent over a decade guiding business owners and accountants through the Profit First system a cash management methodology developed by Mike Michalowicz.
Ron’s mission is clear: to help small businesses survive, thrive, and achieve long-term financial health. “When business owners can pay themselves first, celebrate profit, and hire confidently,” he says, “they build stronger families, communities, and economies.”
Revenue Is Vanity, Profit Is Sanity
One of the core themes of the episode is the dangerous misconception that revenue equals success. Roger and Ron challenge that idea directly.
“Revenue is vanity,” Roger says. “Profit is sanity.”
Ron adds, “You don’t put revenue in your pocket you put profit in your pocket. That’s what keeps the lights on, pays your team, and funds your future.”
Too often, business owners sacrifice profit to fuel top-line growth, only to discover that when the cash runs dry, the business collapses. Profit, not revenue, determines whether a company can weather storms, reinvest in growth, and ultimately survive.
The Profit First Formula That Changes Everything
The Profit First system flips traditional accounting logic on its head. Instead of the standard formula: Sales – Expenses = Profit — Ron teaches a new one: Sales – Profit = Expenses.
He explains, “Structurally, the traditional formula is correct, but behaviorally, it’s wrong. What comes first is important. Profit must come first.”
This small change has a massive psychological impact. By removing profit upfront, entrepreneurs force themselves to run their businesses more efficiently. They make spending decisions based on what’s left not on the illusion of having unlimited funds.
Building Financial Clarity with Multiple Accounts
One of the most practical aspects of the Profit First system is the creation of multiple bank accounts for specific purposes: profit, owner’s pay, taxes, and operating expenses.
Ron explains, “These accounts are not overkill. They’re clarity. When business owners know exactly how much money they have for taxes, payroll, and operations, they sleep better at night. That’s financial peace of mind.”
This separation of funds ensures that business owners never confuse what belongs to the business with what’s available to spend. It replaces anxiety with confidence, and chaos with control.
Busting Myths About Profit First
Ron and Roger also tackle common misconceptions about Profit First. Many assume it’s complicated or only suitable for small businesses. Others dismiss it as just another accounting method.
Ron sets the record straight: “Profit First isn’t accounting or bookkeeping, it’s a cash management system. It sits between financials and forecasting. It’s about controlling cash flow and giving entrepreneurs clarity over their money.”
He adds that the system scales with the business. “We have companies doing hundreds of millions of dollars using Profit First. And it works just as well for startups. It’s about discipline, not size.”
From Accountant to CFO Advisor
A key part of the episode focuses on how accounting professionals can use Profit First to elevate their services from compliance to strategic advisory.
Roger explains, “When I said I could help clients improve profit, they paid attention. Profit First gave me something tangible to implement something that made clients feel in control of their business.”
Ron agrees, emphasizing that accountants who use Profit First can build deeper, more valuable relationships. “Profit First gives you conversation points,” he says. “You can talk strategy, not just compliance. You become a partner in your client’s success.”
Mindset Matters: The 3% Rule for Success
Toward the end of the episode, Ron shares a powerful leadership lesson one that extends beyond finances. His “golden rule” is simple:
“Do what you say you’re going to do, by when you say you’re going to do it and do it 3% better than expectations.”
He explains that success in business is about integrity, consistency, and incremental improvement. Just as the Profit First system enforces financial discipline, this mindset cultivates accountability and growth.
Profit, Purpose, and Financial Freedom
Roger and Ron close the episode by reframing profit as a force for good. Profit isn’t greed it’s what allows entrepreneurs to pay their teams, support their families, give back to their communities, and pursue their purpose.
As Ron puts it, “Profit has no emotion. It’s not good or bad. It’s what you do with it that matters.”
When businesses prioritize profit, they create stability, opportunity, and impact not just for themselves but for everyone around them.
Listen & Learn More
This episode of Building the Premier Accounting Firm is a must-listen for anyone serious about sustainable business growth. Whether you’re an entrepreneur struggling with cash flow or an accountant ready to step into the advisory role, the insights shared by Ron Saharyan will help you think differently about profit, purpose, and long-term success.
Listen to the full episode on YouTube or your favorite podcast platform, and visit UniversalAccounting.com to learn more about implementing the Profit First system and accessing free resources like Your Strategic Accountant and Your Profit & Growth Expert.
Offers:
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Get a FREE copy of these books all accounting professionals should use to work on their business and become profitable. These are a must-have addition to every accountant’s library to provide quality CFO & Advisory services as a Profit & Growth Expert today:
- “Red to BLACK in 30 days – A small business accountant’s guide to QUICK turnarounds” – This is a how-to guide on how to turn around a struggling business into a more sustainable model. Each chapter focuses on a crucial aspect of the turnaround process – from cash flow management to strategies for improving revenue. This book will teach you everything you need to become a turnaround expert for small businesses.
- “in the BLACK, nine principles to make your business profitable” – Nine Principles to Make Your Business Profitable – Discover what you need to know to run the premier accounting firm and get paid what you are worth in this book, by the same author as Red to Black – CPA Allen B. Bostrom. Bostrom teaches the three major functions of business (marketing, production and accounting) as well as strategies for maximizing profitability for your clients by creating actionable plans to implement the nine principles.
- “Your Strategic Accountant” – Understand the 3 Core Accounting Services you should offer as you run your business. help your clients understand which numbers they need to know to make more informed business decisions.
- “Your Profit & Growth Expert” – Your business is an asset. You should know its value and understand how to maximize it. Beginning with the end in mind helps you work ON your business to build a company you can leave so that it can continue to exist in your absence or build wealth as you retire and enjoy the time, freedom, and life you want and deserve.
Learn what it is you can do to become an author, leveraging your expertise to market your services effectively and get the clients you deserve. This is a webinar you don’t want to miss. Learn from Mike Capuzzi what a Shook is and how you can use it to position yourself as the Premier Accounting Firm in your area. This is a must-see presentation so get ready to take some great notes.
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