Profit First: Entrepreneurs, Listen Up!
Profit First. Now there’s an interesting concept for entrepreneurs to adopt. Leave it to Mike Michalowicz to turn our standard business operating system on its ear! Get ready, because your business will never be the same… it’s about to make a profit every day!
The Standard (now old) Business Operating System
Sales – Expenses = Profit
Wrong! No wonder we don’t have as much left over as we’d like!
The NEW Business Operating System (courtesy of Profit First)
Sales – Profit = Expenses
Mike’s concept is easy to implement, we can all do this!
Here’s how Profit First works:
- Use Small Plates – Did you know that the plate size has increased over the years? No wonder we fill them with too much, and then have wasted leftovers. Instead start with a smaller plate, which will still seem like a lot, but you’ll actually be getting smaller portions and fewer calories. That will make you lose weight and feel healthier.
- Serve Sequentially – Don’t dig into the meat and bread first, eat your healthy vegetables and you’ll feel better and the good-for-you stuff won’t be leftover.
- Remove Temptation – I love this tip the most. If we don’t by cookies, ice cream and junk food, they aren’t there to tempt us and we’re not as likely to jump up and go out to get them.
- Enforce a Rhythm – Frequency is the key, rather than binging. If we eat more times a day we’re less likely to overeat because we were too hungry.
Okay so how does this apply to your (up-until-now less than perfect) business and going forward turn more of a profit?
Apply the above Profit First list like this:
- When money comes in you disperse that money into different accounts. The accounts are for different purposes. Profit, Payroll, Taxes, Operating.
- Always disperse to the profit account first.
- Make sure that profit account is at a different bank than your operating account.
- Get into a rhythm of paying bills on the same days each month.
Now of course, I have just touched on all you have to gain from reading this book and changing how your your business operates. Mike has an easy-to-read writing style that is very engaging, sometimes quite funny, all while he is teaching us valuable information. There are charts, diagrams and instructions on how to figure out what’s right for you, given your business size and performance.
Why I think you should listen to Mike Michalowicz and adopt this smarter business building strategy that puts YOU, at the center and finally FIRST?
I have been listening to Mike ever since I first read The Toilet Paper Entrepreneur and then when I read his 2nd book, The Pumpkin Plan, it changed my business mindset forever. (Read my post about The Pumpkin Plan.)
Now I’m ready to change my business operating system, and can’t wait to see where I am in 5-10 years. Get reading, now! Thanks again, MIKE!
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