EP 89: The Profit First System with Mike Michalowicz

The idea of “Profit First” is to instil a behaviour-based cash management system — a system for managing cash that ensures profitability, by putting profitability first. In the simple equation sales minus expenses equals profit, profit comes last. Mike’s theory is if you treat profit as something that comes last, it becomes insignificant. Profit First is a behavioural mechanism that prioritises profitability, ensures sustained profitability and facilitates growth.

Today’s Guest, Mike Michalowicz

By his 35th birthday, MIKE MICHALOWICZ (pronounced mi-‘kal-o-wits) had founded and sold two multi-million dollar companies.

Confident that he had the formula to success, he became an angel investor…and proceeded to lose his entire fortune. Then he started all over again, driven to find better ways to grow healthy, strong companies.

Among other innovative strategies, Mike created the “Profit First Formula”, a way for businesses to ensure profitability from their very next deposit forward.

Mike is now running his third million-dollar venture, is a former small business columnist for The Wall Street Journal; is the former MSNBC business make-over expert; is a popular keynote speaker on innovative entrepreneurial topics, and is the author of Profit First, Surge, The Pumpkin Plan and The Toilet Paper Entrepreneur, which BusinessWeek deemed “the entrepreneur’s cult classic.”

Website: mikemichalowicz.com

Make Your Business Profit First

Step 1: Set up multiple bank accounts and allocate the funds based on percentage.

Step 2: Determine your allocation frequency and sequence.

Step 3: Remove any temptation.

Step 4: Get into the rhythm and stick to it.

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