Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

by Mike Michalowicz

Overview

Author of cult classics The Pumpkin Plan and The Toilet Paper Entrepreneur offers a simple, counterintuitive cash management solution that will help small businesses break out of the doom spiral and achieve instant profitability.

Conventional accounting uses the logical (albeit, flawed) formula: Sales - Expenses = Profit. The problem is, businesses are run by humans, and humans aren't always logical. Serial entrepreneur Mike Michalowicz has developed a behavioral approach to accounting to flip the formula: Sales - Profit = Expenses. Just as the most effective weight loss strategy is to limit portions by using smaller plates, Michalowicz shows that by taking profit first and apportioning only what remains for expenses, entrepreneurs will transform their businesses from cash-eating monsters to profitable cash cows. Using Michalowicz's Profit First system, readers will learn that:

· Following 4 simple principles can simplify accounting and make it easier to manage a profitable business by looking at bank account balances.
· A small, profitable business can be worth much more than a large business surviving on its top line.
· Businesses that attain early and sustained profitability have a better shot at achieving long-term growth.

With dozens of case studies, practical, step-by-step advice, and his signature sense of humor, Michalowicz has the game-changing roadmap for any entrepreneur to make money they always dreamed of.

Product Details

ISBN-13:	9780735214149
Publisher:	Penguin Publishing Group
Publication date:	02/21/2017
Series:	Entrepreneurship Simplified
Edition description:	Reissue
Pages:	224
Sales rank:	29,317
Product dimensions:	6.30(w) x 9.10(h) x 1.00(d)

About the Author

MIKE MICHALOWICZ launched and sold two multi-million dollar companies and is co-founder of Profit First Professionals, a membership organization of accountants, bookkeepers and business coaches who teach the Profit First method. He is a former columnist for The Wall Street Journal, is a popular speaker and has shared his insights on business and entrepreneurship at TEDx, creativeLIVE, INCmty and others. He is the author of The Pumpkin Plan and The Toilet Paper Entrepreneur. His columns have appeared in Entrepreneur Magazine, Open Forum, and Harvard Business Review.

Read an Excerpt

Chapter 1
(Continues…)

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Excerpted from "Profit First"
by .
Copyright © 2017 Mike Michalowicz.
Excerpted by permission of Penguin Publishing Group.
All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
Excerpts are provided by Dial-A-Book Inc. solely for the personal use of visitors to this web site.

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Table of Contents

Introduction 1

Chapter 1 Your Business is an Out-of-Control Cash-Eating Monster 11

Chapter 2 The Core Principles of Profit First 34

Chapter 3 Setting Up Profit First for your Business 49

Chapter 4 Assessing The Health of your Business 59

Chapter 5 Allocation Percentages 75

Chapter 6 Putting Profit first Into Motion 89

Chapter 7 Destroy your Debt 114

Chapter 8 Find Money within your Business 133

Chapter 9 Profit First-Advanced Techniques 148

Chapter 10 The Profit First Life 163

Chapter 11 How to Keep it from Falling Apart 177

Epilogue 189

Acknowledgments 193

Appendix 1 The Profit First Quick Setup Guide 195

Appendix 2 The Instant Assessment Form 197

Appendix 3 Glossary of Key Terms 199

Index 201

Editorial Reviews

Praise for Profit First

“Quit being a slave to your own business and start making some serious money. Follow Mike’s counter-intuitive advice and put profits first.”
—VERNE HARNISH, author of Scaling Up

“Profit First is a brilliant smack-upside-the-head revelation for entrepreneurs. Most small businesses look pretty good on the outside, yet actually struggle to stay afloat. With fascinating stories and wit, Michalowicz shows how to remove your nose from the grindstone, climb out of the quicksand, and build a business that loves you back.”
—SALLY HOGSHEAD, author of Fascinate

“Profit First may arguably be one of the greatest ‘hacks’ of all time. Apply the pay-yourself-first principle to your business and watch the profits roll in.”
—CHRIS GUILLEBEAU, author of Born for This and The $100 Startup
 
"Profit First is a game-changer. I implemented the system into both of my businesses and increased profits by 21%. If you want to turn a profit and grow your business, you need this book."
—MICHAEL PORT, author of Steal the Show
 
"Profit First completely transformed how I handle business banking. I hadn't even finished the book before immediately putting a four-account distribution system in place for new income: operating expenses, owner expenses, taxes and profit. Mike's system moved me from break-even to profitable within a month. This book is a must-read for businesses large and small."
—JENNY BLAKE, author of Pivot
 
“Twenty-five percent of small businesses have two weeks or less of cash in the bank. Seventy-five percent of businesses have a month or less of cash in the bank. Profit First disciplines show you the roadmap to avoid becoming a statistic. This book has the potential to change the next 20 years of your small business life.”
—DAWN FOTOPULOS, Associate Professor of Business, The King’s College NYC; author of Accounting for the Numberphobic
 
“Profit First is a revelation. I only wish I knew about this system when I started my first business.”
—JOHN JANTSCH, author of Duct Tape Marketing and SEO for Growth

“Entrepreneurs commonly confuse cash flow with profitability. Profit First makes the process so radically simple that you no longer have an excuse not to be profitable AND have cash flow!”
—GREG CRABTREE, author of Simple Numbers, Straight Talk, Big Profits

“Not only is Mike one of the most innovative small business authors of our time, his Profit First system—simple to apply and impactful in its results—can be the difference between constantly walking the financial tightrope or being predictably profitable. And a predictably profitable business is not only less stressful and more gratifying, it allows you to focus on what really matters… serving your customers!”
—BOB BURG, coauthor of The Go-Giver and The Go-Giver Leader

"Why are so few businesses actually profitable for their owners? Profit First turns accepted wisdom on its head and shows the real reason business owners struggle with the bottom line. This book shows you how to take home more money almost immediately."
—DORIE CLARK, author of Stand Out

“Finance is the top headache of an entrepreneur. Profit First is a must-read to avoid bankruptcy for great business ideas. Clever, easy to implement and absolutely effective (plus you will enjoy reading it).”
—SOFIA MACIAS, author of Pequeño Cerdo Capitalista

“Entrepreneurs and small business advisors finally have a practical toolkit for increasing profitability! Everyone who touches the small business world should read and apply these game-changing principles.”
—JOE WOODARD, CEO of Woodard Events and Woodard Consulting

“I took the pledge and started implementing the Profit First system after reading Chapter One. By the time I was halfway through the book my business had already turned a profit.”
—BARRY MOLTZ, author of How to Get Unstuck

From the Publisher

I took the pledge and started implementing the Profit First system after reading Chapter One. By the time I was halfway through the book my business had already turned a profit.

author of How to Get Unstuck BARRY MOLTZ

Not only is Mike one of the most innovative small business authors of our time, his Profit First system—simple to apply and impactful in its results—can be the difference between constantly walking the financial tightrope or being predictably profitable. And a predictably profitable business is not only less stressful and more gratifying, it allows you to focus on what really matters… serving your customers!

coauthor of The Go-Giver and The Go-Giver Leader BOB BURG

Profit First is a game-changer. I implemented the system into both of my businesses and increased profits by 21%. If you want to turn a profit and grow your business, you need this book.

author of Steal the Show MICHAEL PORT

Why are so few businesses actually profitable for their owners? Profit First turns accepted wisdom on its head and shows the real reason business owners struggle with the bottom line. This book shows you how to take home more money almost immediately.

author of Stand Out DORIE CLARK

“Entrepreneurs commonly confuse cash flow with profitability. Profit First makes the process so radically simple that you no longer have an excuse not to be profitable AND have cash flow!

GREG CRABTREE

Quit being a slave to your own business and start making some serious money. Follow Mike’s counter-intuitive advice and put profits first.

author of Scaling Up VERNE HARNISH

Profit First may arguably be one of the greatest ‘hacks’ of all time. Apply the pay-yourself-first principle to your business and watch the profits roll in.

author of Born for This and The $100 Startup CHRIS GUILLEBEAU

Finance is the top headache of an entrepreneur. Profit First is a must-read to avoid bankruptcy for great business ideas. Clever, easy to implement and absolutely effective (plus you will enjoy reading it).

author of Pequeño Cerdo Capitalista SOFIA MACIAS

Twenty-five percent of small businesses have two weeks or less of cash in the bank. Seventy-five percent of businesses have a month or less of cash in the bank. Profit First disciplines show you the roadmap to avoid becoming a statistic. This book has the potential to change the next 20 years of your small business life.

DAWN FOTOPULOS

Profit First is a revelation. I only wish I knew about this system when I started my first business.

author of Duct Tape Marketing and SEO for Growth JOHN JANTSCH

Entrepreneurs and small business advisors finally have a practical toolkit for increasing profitability! Everyone who touches the small business world should read and apply these game-changing principles.

CEO of Woodard Events and Woodard Consulting JOE WOODARD

Profit First is a brilliant smack-upside-the-head revelation for entrepreneurs. Most small businesses look pretty good on the outside, yet actually struggle to stay afloat. With fascinating stories and wit, Michalowicz shows how to remove your nose from the grindstone, climb out of the quicksand, and build a business that loves you back.

author of Fascinate SALLY HOGSHEAD

Profit First completely transformed how I handle business banking. I hadn't even finished the book before immediately putting a four-account distribution system in place for new income: operating expenses, owner expenses, taxes and profit. Mike's system moved me from break-even to profitable within a month. This book is a must-read for businesses large and small.

author of Pivot JENNY BLAKE