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.
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 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.
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.
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:
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.
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.
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.
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).
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.