Want to learn the ideas in Profit First better than ever? Read the world’s #1 book summary of Profit First by Mike Michalowicz here.
Read a brief 1-Page Summary or watch video summaries curated by our expert team. Note: this book guide is not affiliated with or endorsed by the publisher or author, and we always encourage you to purchase and read the full book.
Video Summaries of Profit First
We’ve scoured the Internet for the very best videos on Profit First, from high-quality videos summaries to interviews or commentary by Mike Michalowicz.
1-Page Summary of Profit First
Overview
Businesses that fail to make money are often in trouble. If you’re putting in the work and not seeing results, it might be time to take a closer look at your business model. The good news is that most of the time, if there’s an issue with how your business makes money, it’s not because of you; instead, it usually lies within the system itself. In order to fix this problem and get back on track toward profitability, we have to stop viewing our businesses as profit-making machines (which they aren’t) and start thinking about them as expense-reducing machines (which they are). This may sound strange at first but will help you focus on what really matters: making money! These steps will get you started on creating a profitable business: Take an instant assessment of your financial health by tracking income versus expenses. Set up separate bank accounts for each category so all transactions can be tracked easily. Create “hold” accounts for taxes and profits so these funds don’t become too accessible or tempting while building wealth over time. Determine what percentage of income should go into which account now based on immediate needs/obligations vs future goals/investments then stick with those allocations no matter how much cash comes in or goes out—it’ll keep things simple! Start using Profit First by paying yourself first via direct deposit from one checking account (your owner compensation fund), then pay your bills from another checking account (your operations expense fund), followed by taxes paid directly through online banking from yet another checking account (your tax hold fund). Use Profit First to dig out of debt quickly by having enough cash flow coming in every month after covering expenses before taking any personal spending money home—and use this extra cash flow wisely! Focus on efficiency by cutting back unprofitable services or clients who drain resources without adding value until everything is efficient enough for just one person working part-time plus outsourcing nonessential tasks like bookkeeping/accounting etc., until eventually being able to run the entire company solo while maintaining high quality standards & keeping low overhead costs thanks to automation tools like Xero accounting software — thus allowing everyone else doing similar roles elsewhere around town who charge 3x more per hour than I do + travel costs + office space rental + equipment leasing fees etc., thereby saving customers lotsa $$$$ = win-win situation! Then live a “profit first” lifestyle where my wife & I only spend what we bring home after meeting our monthly savings targets e.g.: 10% saved automatically via auto transfers into investment accounts; 20% saved manually when we receive bonuses/commissions etc.; 30% saved manually when we receive raises/promotions etc.; 50% saved manually as soon as possible after receiving regular monthly salary payments i.e.: 60+ days net pay rule always applies even during retirement years ; 100% saved manually once annual bonuses hit 6 figures e. g. : $100K bonus => save $60K immediately ; also apply same rules regarding saving some portion off capital gains earned off stock market investments whether held long term or short term, therefore living below means rather than above means, hence achieving financial security early rather than later !
Your Business Is an Out-of-Control Cash-Eating Monster
You may have started your business and brought it to life. However, like Dr. Frankenstein, you might find that the monster has taken control of your business. If this is true for you, take back that control by using a few strategies which will be discussed in the rest of the article.
