December 20, 2014

Are You Now Ready to Put “Profit First?”

Content
Freshness
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Summary


A handbook financial survival guide for small business owners committed to actually making money for THEMSELVES.

profit first

If you’re the gentle, sensitive sort who takes yourself and your business seriously – don’t read this review, don’t read this book, just go off and do something else.  You won’t like what you read here and you won’t like Mike. You will think the book I’m reviewing is doggie doo. You should just save yourself some brain space and go off living your life and running your business as it is.

But don’t let me or anyone else ever hear you complaining about your business not making money, or the fact that you’re working too much, too hard and you have no money to enjoy the three minutes of free time you’ve scrounged together to take a bathroom break.

Are They Gone?  Good.

Now that I’m speaking to the audience that’s ready to hear this, let me get to it.  Don’t let the title fool you; Profit First: A Simple System to Transform Any Business From a Cash-Eating Monster to a Money-Making Machine by Mike Micbalowicz (@MikeMichalowicz) sounds a little “get-rich-quick-y,” but it’s not.  This is a book so well written and targeted to YOU – that you will think Mike’s been hiding under your desk.

Those overly-serious folks think that this kind of stuff is too vapid for them.  Why don’t we just let them do their thing? Then those of us who aren’t ashamed to face our financial demons will move forward with our thing.  Today, this includes getting yourself a copy of Profit First.

“Do I Have To?”  YES!

If your business isn’t making money….wait, that’s not right.  If YOU don’t have enough money to live the life you set out to live when you started this business, then guess what?  You don’t have a business.

Oh, so you want to have a business? Then you’ll need to start making money and Profit First will show you how.  Even those of you who can’t stomach the thought of dealing with finance will find yourself saying things like, “I can do that.”  And before you know it, you will start seeing those dollars in your bank account rising.

How Does This Stupid System Work?

Sorry Mike, but I’m calling it a stupid system because it’s so crazy, stupid easy, that even I can do it – and that is saying a lot.  Let me explain.

Just like in The Pumpkin Plan, Mike gets an epiphany from a seemingly unrelated incident.  He’s watching late night infomercials or something and suddenly realizes the connection between a healthy and fit lifestyle and a healthy and fit business.

Not one to let a great metaphor go to waste, he starts exploring the idea further.  The Profit First system is set up using four key principles in eating right and living a healthy lifestyle:

  1. Small Plates:  The idea here is to work with your innate need to finish everything on your plate.  The solution is to reduce the size of the plate, thereby reducing the size of your portion.  Translated to your business, when money comes into your business, immediately send portions of it out to the following accounts – profit, tax, salary, operating expenses.
  2. Serve sequentially:  When eating your smaller portions, start with the vegetables first, it fills you up with good stuff.  Now, to the business side.  When dispersing the money that comes into your business across those accounts, pay profit first.
  3. Remove temptation: You know about this one, get rid of the cookies, the junk food and any temptation that will take you off track from your healthy eating.  In your business, get that profit account out of easy reach.  Move it to a different bank, automate the deposits, don’t look at it and just make it hard to steal from yourself.
  4. Enforce a rhythm:  Don’t eat when you’re hungry.  The idea is to munch a few calories every couple hours.  The same holds true for your business, don’t pay bills when you have money, pay them regularly (he recommends the 10th and 25th of the month).

It’s So Easy, Even I Can Do It

Okay, you twisted my arm. Let me give you another example of why this goes on my desk as the book that will motivate me to be the master of my business.

It’s called the “in just one more day” technique that Mike learned from one of his friends.  Here’s how it works:

Whenever you see something you want to buy for your business, just say, “In just one more day” to yourself and move on.  Keep doing this until you just can’t live another day without this purchase.

If you haven’t guessed it, this is working on the standard profit equation income – expenses = profit.  But instead of denying yourself something because you “can’t afford it,” you’re simply postponing it until your business absolutely needs it.

This isn’t applicable to everything. But you and I both know that we have a tendency to think we need something when our business will do perfectly well without it.

Why You Will Like Mike

It’s not surprising that Mike knows how your business is going – he’s got a lot of experience in starting from scratch, toughing it out bootstrapping, succeeding massively, failing profoundly, having the “come-to-Jesus” moments with his wife and family, getting back up, learning from his mistakes – and living to write about it.

As many of you may already know, I’m a friend of Mike Michalowicz (remember, he’s the author of Toilet Paper Entrepreneur and The Pumpkin Plan).  I’d like to say that “I knew him when” because I have known him since about 2008 or so.  Wow, that’s a long time.

What can I tell you? We’re professional friends and I’ve been gratefully receiving early copies of his books since – well, since he wrote Toilet Paper Entrepreneur.

Should We Let the Others In On It?

I’m not one to force anyone into reading anything.  I always like to say that each book has its perfect audience.  Like I said at the start of this review, this isn’t for everyone.  Some people are just too uptight to appreciate the kind of advice that’s in this book.

I’m also sure that a few financial or accounting experts would think of some way to find fault with the advice that’s in this book. But if you’ve been secretly disappointed in yourself and telling yourself that you’ve got to get control of your business finances, then this is for you.

Maybe you’ve been working like a dog, investing in your business and then getting sort of sick when you look at your bank account or P&L. You’ll want to read this book then.

Finally, if you’ve been committed to spending more time living the life you set out to live when you started this business, but have been a slave to it instead – because of your financial performance – then you can’t afford to miss out on what Michalowicz offers.

4 Comments ▼

Ivana Taylor - Book Editor


Ivana Taylor Ivana Taylor is Book Editor for Small Business Trends and publisher of DIYMarketers , where she shares daily do-it-yourself marketing tips, and is the President of Third Force, Inc., a marketing firm that specializes in getting your ideal customer to choose you. Ivana is the book editor for Small Business Trends and co-author of the book "Excel for Marketing Managers."

4 Reactions

  1. thanks for posting this great review Ivana. I have been following Mike since he wrote his first book and truly like his viewpoints and sincere way of getting his message across. As entrepreneurs many of us are guilty of mismanaging our finances to our own detriment . I look forward to getting a copy of Profit First and implementing these methods into my business ASAP.

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