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

by Mike Michalowicz

The Survival Trap promises fast money, but when we’re caught in it, we, like Ernie, rarely think about the massive cost of opportunity; and most of the time, we can’t discern profitable income from debt-generating income.

looking at the money in your bank account as one pool from which you can operate your business without first addressing tax issues or your own salary,

Our definition of profit is simple: cash in the bank. Cold. Hard. Cash. For us.

Email me right now (my email is Mike@MikeMichalowicz.com) with the subject line “I’ve Drawn the Line in the Sand,” and tell me that you are committed to profitability.

There is more to a healthy diet, and it is based on four core principles of weight loss and nutrition.

When less money is available to run your business, you will find ways to get the same or better results with less. By taking your profit first, you will be forced to think smarter and innovate more.

To get there, you take your profit first and the answers to being the best at something will reveal themselves.

INCOME PROFIT OWNER’S COMP TAX OPEX

PROFIT HOLD and TAX HOLD.

Lisa’s revenue has doubled every month so far since she made the shift.

At $500,000 to $1,000,000, the growth trend and patterns continue with more systems and more people. Focus on increasing profits because, for so many businesses, the growth from $1,000,000 to $5,000,000 is the hardest. You want a little reserve.

Instant Assessment on your business, do it now.

if you work toward it and believe it’s a possibility, you will not only achieve it, you will blow past the “reasonable” numbers others have set.

Then, next quarter, you will move your CAP to 3 percent,

FAT MARGINS DRAW STIFF COMPETITION

Working on your business is about building systems. Period.

As your annual revenue grows past $500,000, you will transition to spending more time building systems. Now you’re a systems developer 20 percent of the time, a manager 10 percent of the time, and an employee 70 percent of the time.

The tweak is, when you distribute profits, 99 percent of the money goes to paying down debt. The remaining 1 percent goes toward rewarding yourself.

If you want to get out of debt, you must get more enjoyment out of saving your money than you do spending your money.”

Ramsey tells us to pay only the minimum on all the debts, except the one at the top of the list—the smallest one.

get two times the results with half the effort.