If you don't know your target allocation percentages, you don't have a financial plan for your business. In this episode, I break down what TAPs actually are, why most business owners are running on the "hope and pray plan," and how knowing the right percentages—based on where your business is right now—can be the difference between financial chaos and a clear path to freedom.

We talk about the five core Profit First bank accounts, what percentages you should be hitting at different revenue levels, and how to get started even if you're currently spending more than you're making. Whether you're brand new or already doing seven figures, this episode gives you a target to aim for.

Timeline Highlights

[0:26] Why not knowing your TAPs means you have no financial plan

[0:48] What target allocation percentages actually are (and why they matter)

[1:17] How Profit First works and why it's like the envelope method for your business

[1:58] The five Profit First bank accounts explained

[2:17] Why I call profit, owner's comp, and owner's tax the "Golden Trio"

[3:19] The danger of the "black hole bank account"

[4:02] How TAPs answer the question: how much goes where?

[4:22] Why most businesses are built on the hope and pray plan

[5:12] TAP breakdown for businesses doing $0–$250K in revenue

[6:23] Why owner's comp is 50% at the early stage

[6:46] How the percentages shift dramatically as you grow past $250K

[7:36] Why you should never reinvest every dollar back into the business

[8:14] The difference between TAPs (targets) and CAPs (current allocation percentages)

[8:58] How to start with 1% to each Golden Trio account if you're upside down

[9:17] How Profit First builds wealthy business habits—not just bank accounts

[10:23] Where to find the full TAP breakdown for every business size

Key Takeaways

1. If you don't have target allocation percentages, you don't have a real financial plan.
2. The five Profit First accounts are: income, profit, owner's comp, owner's tax, and operating expenses.
3. At $0–$250K revenue, aim for 15% profit, 50% owner's comp, and 15% owner's tax.
4. As your business grows past $250K, percentages shift—more toward opex, less toward owner's pay.
5. Never reinvest every dollar back into the business—always protect the Golden Trio.
6. Start where you are: even 1% to each Golden Trio account is progress.
7. TAPs are your goal; CAPs (current allocation percentages) are your starting point.

Links & Resources

Get the full TAP breakdown for your business size and book a free discovery call: simplecfo.com

Closing

Thanks for spending time with me today. If this episode gave you clarity or a new perspective, be sure to like, subscribe, and comment below. If you're ready to apply what we talked about today with real guidance and accountability, visit profitrei.com to schedule a free discovery call and create your path to financial clarity and freedom.