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

by Mike Michalowicz

Right now I want you to set up your PROFIT account. It is the first step in the Profit First system, so do it right now. Call your bank (or do it online) and set up one new checking account. Don’t get mired in whether it should be a savings account or a sweep account or any of that. The five seconds you spend thinking about it cost more than the little dribble of interest it will yield. Your goal is just to get started and not to slip back. After setting up this new checking account at your bank, nickname the account PROFIT, and from this moment forward from any deposit you put into your normal checking account, transfer 1 percent of that deposit into your PROFIT account. Then proceed with your business and processes and money management as you have in the past. Just add to the PROFIT account, and never touch it (until you get to the section of this book where I explain what to do with it). If you get a $1,000 deposit, I am telling you, starting today, transfer $10 into your PROFIT account. If you could run your business off $1,000, you can surely run it off $990. If you get $20,000 in deposits, you transfer $200 into your PROFIT account. If you can run your business off $20,000 you absolutely can run it off $19,800. You’ll never miss that 1 percent. It is a low bar. But something magical will happen. You will start proving the system to yourself. You won’t get rich overnight this way, but you will get a wealth of confidence. You will have a flavor of how powerful it is to...