Take your Profit First!

1 October 2019


Today I just want to recommend a book to you.  

I don't know this guy but I've read most of Mike Michalowicz's books.

His book Profit First really had an impact on me.

It seemed so simple, yet I wasn't doing it.

If you're like many of the business owners I talk to you don't regularly review your Profit & Loss statement and Balance Sheet - you look at your bank accounts...

The problem is, come the end of the year the accountant says you've made a profit, but you're saying... really, where's the money?

Mike explains that the traditional way of managing your money is dumb.

Put simply, we usually say:

Income - Expenses = Profit

The problem arrises because of Parkinson's Law, which is 'work expands to fill the time available'.  Applied to expenses this becomes 'expenses increase the more money there is'.

So what happens?  There's never anything left at the end.

What to do?  As the title suggests it's to take your Profit First, and run the business on what's left.

Income - Profit = Expenses

I didn't invent this, but I have absolutely benefited from it.  And I believe you can too (hence the recommendation).

Mike's book Profit First provides a simple, step by step explanation that's easy to implement. If you hate accounting, or just can't seem to turn a profit.....this is the method for you.

Hope it's helpful.

Brett Baker :)
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