How to Get Paid First: The ‘Profit First’ Method for Architects

Flip the script on your finances, pay yourself first.

Why Architects Are Always Paid Last (And Why That’s a Problem)

You create value every day. But you’re paid last.
Expenses rise. Profit shrinks. Parkinson’s Law wins.

Most practices follow the default equation:

Income – Expenses = Profit

Here’s the flaw: as costs creep up, profit gets squeezed or disappears.
It isn’t just a pricing issue; even £500k+ studios fall into the trap because spending expands to fill whatever’s available.

The Profit First Method

Reverse the equation so profit is guaranteed, not guessed:

Income – Profit = Expenses

This is Profit First (Mike Michalowicz), adapted for architecture. Every pound you earn contributes to profit before you pay anyone else, even HMRC.

Why It Works for Architects

Architecture income is lumpy. Payments land at milestones, sometimes late. Costs move around.
Profit First converts irregular income into predictable pay and buffers. It:

• Protects profit from erosion

• Builds reserves in strong months

• Shows, clearly, what you can actually afford

The Five-Account Setup

Make it tangible with separate accounts or “pots”:

1. Income Account
   All revenue lands here first.

2. Profit Account
   Transfer 5–15% immediately. This is your reward, not an afterthought.

3. Owner’s Pay Account
   Pay yourself consistently (no more “leftovers”).

4. Tax Account
   Set aside 12–20% so January never hurts.

5. Operating Expenses Account
   Spend only from this pot. If it isn’t here, you can’t afford it.

Optional pots for extra control: Project Costs, Marketing, Professional Development (and VAT if registered).

Adapting Profit First for Project-Based Practices

Invoices can arrive in £10,000 chunks after weeks of work. Don’t wait for month-end.
Rule: make your Profit First transfers the same day the funds clear. Keep discipline aligned with your irregular cash cycle.

What Percentage Should You Start With?

Benchmarks for established small firms:

• Profit: 10%

• Owner Pay: 30%

• Tax: 15%

• Operating Expenses: 45%

Worked example on a £10,000 payment (using the benchmark split):

• Profit: £1,000

• Owner’s Pay: £3,000

• Tax: £1,500

• Operating Expenses: £4,500

If that feels heavy, start tiny and build: allocate 1% to profit on your very next payment (£100 on £10,000) and increase each quarter.

Scarcity vs. Sufficiency

Profit First is a leadership habit as much as a cash habit. Ask:

• How do we earn more from projects we already have?

• Where are the margin leaks?

• Which overheads don’t earn their keep?

Focus on profit per project, not just top-line revenue. That’s how you grow without chaos.

Turning Chaos into Clarity

“Payroll was a guess, despite a full pipeline. After Profit First, we built a three-month buffer and took a real profit distribution. Our fees didn’t change; our habits did.”

UK-based architect and coaching client

“But What If There’s Not Enough Left?”

Then you’ve found the truth.

If there isn’t enough after profit and owner pay, you’re overspending, or underpricing. Use the clarity:

• Reduce overheads (subscriptions and low-ROI spend)

• Bill for scope creep, every time

• Delegate instead of doing everything yourself

• Reprice future work (value-based fees, minimums)

If the gap remains, your model needs adjustment. Profit First surfaces that fast.

Implementation Plan: Start in 5 Steps

1. Open separate bank accounts (or sub-accounts/pots).

2. Allocate 1% to profit from your next invoice, and automate if possible.

3. Set an owner’s salary and stick to it (standing order).

4. Transfer Tax and Operating Expense allocations when payments land.

5. Review monthly and increase your profit percentage each quarter.

Start today (quick checklist)

• Open pots/sub-accounts with your current bank

• Set standing orders for Profit and Tax

• Decide starting percentages (even 1% is a win)

• Make your first transfer on the next client payment

The Long-Term Wins

Consistent use delivers:

• Lower stress and fewer money shocks

• Predictable pay for you

• Capacity to invest in team, tools, or time off

• Decisions driven by data, not panic

Three metrics to track monthly:

• Profit percentage (trend)

• Months of cash buffer

• On-time tax provision (target 100%)

Your Practice, Your Profit

You didn’t start a practice to be an unpaid manager. With Profit First, your financial well-being becomes non-negotiable.

Profit fuels better design, better service, and better balance.

Next Step

Download the Financial Habits Worksheet

• Set up your accounts in about 30 minutes

• Pick your starting percentages in 10 minutes

• Run your first transfer on your next client payment