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  • Writer's pictureJacob Curtis

How to Destroy Your Debt

Well-dressed poverty is still poverty. Just because your business is making a lot of money doesn’t mean you’re keeping it. Often we focus too much on the top line (sales) and think that someday we’ll make it. If I only work hard enough. Once I break $250,000 in sales, I’ll finally have enough to bring home the bacon! And so you take out a loan and buy inventory. And get your shop looking cute. Customers come; you’re selling fabric, paying (most) of the bills. And before you know it, you’ve made $250,000, BUT you’re not where you thought you’d be. And so, you think everything will be fine when I make it to $500,000. And then $500,000 comes, and you’re still barely taking anything home for yourself. This pattern continues up and up. I have seen it with small $250,000 shops and all the way up to $2 million shops. You have the wrong focus. You are trying to sell and borrow our way into financial freedom. But money and quilts shops just do not work that way. But using the Profit First system in your quilt shops does work to piece together financial freedom.

You’re probably wondering why I am talking about profit in this blog after all, this blog is titled How to Destroy Your Debt, not How to Make a Profit. That’s understandable, especially if you are drowning in debt and barely keeping your head above water. How can I talk about profit? Because it is only with the profits that you can dig yourself out of that debt hole.

This is the ultimate survival moment. If you focus all your energy on paying down debt, that is all you will achieve. You’ll still be caught in the top-line thinking mentality, which will more than likely end with you in another debt hole and probably an even bigger one.

Even when your quilt shop is in debt, you must establish a habit of putting your profit first. You must still pay yourself first. Using the Profit First system will fix the problem permanently. Financial crises will be a thing of the past because you’ll have cash and won’t be paying it out as debt payments. Financial guru Dave Ramsey says Debt is the number one wealth killer.

The Profit First system I’m teaching you will keep your focus on a super healthy quilt shop, working in your sweet spot to produce goods and provide services for your ideal customers. This laser focus will automatically keep your costs down, allowing you to pay off debt faster and eventually increase your Profit percentage. The tweak is when you distribute the profits, 99 percent of the money goes to paying down debt. The remaining 1 percent goes toward rewarding yourself. This way, the debt gets hit just as aggressively, but you still strengthen your Profit First habit.

Suppose you wait to start Profit First until after you’ve paid off or paid down your debt. In that case, you are less likely ever to build the business efficiencies that will permanently eradicate your debt and create a perpetual profit stream. Start the habit now, and that 99 percent will eventually go toward building up your cash reserves and your own owner distribution.

Here are four tips to help you destroy your debt.

Number 1 - Enjoy saving more than you enjoy spending. When something makes you happy in the moment, you’ll keep doing it. If spending makes you happy, you’ll spend more. And that spending could range from an extra bolt of fabric here to a new hire there, racking up the debt even more. But when you enjoy saving more, you’ll look for opportunities to save more—coupons, sales, bargain bins, etc. And saving 100 percent because you eliminated the expense entirely is nirvana!

Give yourself more joy when you choose not to spend money than when you choose to spend it. Give yourself joy when your bottom line grows. Give yourself joy when you increase your profit percentage. Enjoy saving more than you enjoy spending.

Number 2 - Keep your numbers in perspective. Your best month is not the new normal. Looking at your numbers on a daily, weekly, or monthly basis can be dangerous. If you have a great month, you often expect to do that well the following month, so you prepare for it, usually by spending more than you should. This new “best” month becomes the expectation, not the exception. Instead, you should look at a rolling twelve-month average and compare that to the current month.

And that is why Profit First percentages are a valuable tool. When a big month comes, you put in a varying sum of money in your accounts. When a terrible month comes, you put in a varying sum of money in your accounts, but always the same percentage, keeping your numbers in perspective.

Number 3 - Freeze your debt. By this, I mean stop adding more debt to your quilt shop. Cut up the credit cards; stop drawing on the line of credit. How can you expect to pay down (or pay off) your debt if you keep using debt to run your business? I have a free downloadable tool called Debt Freeze that walks you through the steps to cut expenses from your quilt shop. Click the link in the description to download it today. You may also want to check out my other free tools, Building a Leaner Team and More Cuts, linked below.

Number 4 - Read The Momentum Theorem by Dave Ramsey. This quick read is about creating unstoppable momentum in all areas of your life, including your quilt shop. The cliff notes version is this: Focused intensity, over time, and multiplied by God equals unstoppable momentum.

Momentum builds slowly but relentlessly. Small, repetitive, continuous actions, chained together, build significant momentum. And that is how you destroy your debt and piece together financial freedom.

Using these principles of Profit First (and common sense) saved our quilt shop. If you stick to them, it can help you too. Click the link in the description below to download the free step-by-step guide.

On May 17th, I am hosting a webinar on Profit First. I would love to see you there, so please click the link to register.

Remember, You can only pay off your debt with the profits of your quilt shop. You get profits by enjoying saving more than spending, keeping your numbers in perspective, freezing your debt, and employing the momentum theorem.

Debt Freeze Guide:

Leaner Team Guide:

More Cuts Guide:


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