Profit First by Mike Michalowicz
The author of cult classics The Pumpkin Plan and The Toilet Paper Entrepreneur offers a simple, counterintuitive cash management solution that will help small businesses break out of the doom spiral and achieve instant profitability.
Conventional accounting uses the logical (albeit, flawed) formula: sales – expenses = profit. The problem is, businesses are run by humans, and humans aren’t always logical. Serial entrepreneur Mike Michalowicz has developed a behavioral approach to accounting to flip the formula: Sales – Profit = Expenses. Just as the most effective weight loss strategy is to limit portions by using smaller plates, Michalowicz shows that by taking profit first and apportioning only what remains for expenses, entrepreneurs will transform their businesses from cash-eating monsters to profitable cash cows. Using Michalowicz’s Profit First system, readers will learn that:
Following four simple principles can simplify accounting and make it easier to manage a profitable business by looking at bank account balances.
A small, profitable business can be worth much more than a large business surviving on its top line.
Businesses that attain early and sustained profitability have a better shot at achieving long-term growth.
With dozens of case studies, practical step-by-step advice, and his signature sense of humor, Michalowicz has the game-changing road map for any entrepreneur to make money they always dreamed of.
Praise for Profit First
“Quit being a slave to your own business and start making some serious money. Follow Mike’s counter-intuitive advice and put profits first.”
–VERNE HARNISH, author of Scaling Up
“Profit First is a brilliant smack-upside-the-head revelation for entrepreneurs. Most small businesses look pretty good on the outside, yet actually struggle to stay afloat. With fascinating stories and wit, Michalowicz shows how to remove your nose from the grindstone, climb out of the quicksand, and build a business that loves you back.”
–SALLY HOGSHEAD, author of Fascinate
“Profit First may arguably be one of the greatest ‘hacks’ of all time. Apply the pay-yourself-first principle to your business and watch the profits roll in.”
–CHRIS GUILLEBEAU, author of Born for This and The $100 Startup
Profit First is a game-changer. I implemented the system into both of my businesses and increased profits by 21%. If you want to turn a profit and grow your business, you need this book.
–MICHAEL PORT, author of Steal the Show
Profit First completely transformed how I handle business banking. I hadn’t even finished the book before immediately putting a four-account distribution system in place for new income: operating expenses, owner expenses, taxes and profit. Mike’s system moved me from break-even to profitable within a month. This book is a must-read for businesses large and small.
–JENNY BLAKE, author of Pivot
“Twenty-five percent of small businesses have two weeks or less of cash in the bank. Seventy-five percent of businesses have a month or less of cash in the bank. Profit First disciplines show you the roadmap to avoid becoming a statistic. This book has the potential to change the next 20 years of your small business life.”
–DAWN FOTOPULOS, Associate Professor of Business, The King’s College NYC; author of Accounting for the Numberphobic
“Profit First is a revelation. I only wish I knew about this system when I started my first business.”
–JOHN JANTSCH, author of Duct Tape Marketing and SEO for Growth
“Entrepreneurs commonly confuse cash flow with profitability. Profit First makes the process so radically simple that you no longer have an excuse not to be profitable AND have cash flow!”
–GREG CRABTREE, author of Simple Numbers, Straight Talk, Big Profits
“Not only is Mike one of the most innovative small business authors of our time, his Profit First system–simple to apply and impactful in its results–can be the difference between constantly walking the financial tightrope or being predictably profitable. And a predictably profitable business is not only less stressful and more gratifying, it allows you to focus on what really matters… serving your customers!”
–BOB BURG, coauthor of The Go-Giver and The Go-Giver Leader
Why are so few businesses actually profitable for their owners? Profit First turns accepted wisdom on its head and shows the real reason business owners struggle with the bottom line. This book shows you how to take home more money almost immediately.
–DORIE CLARK, author of Stand Out
“Finance is the top headache of an entrepreneur. Profit First is a must-read to avoid bankruptcy for great business ideas. Clever, easy to implement and absolutely effective (plus you will enjoy reading it).”
–SOFIA MACIAS, author of Pequeño Cerdo Capitalista
“Entrepreneurs and small business advisors finally have a practical toolkit for increasing profitability! Everyone who touches the small business world should read and apply these game-changing principles.”
–JOE WOODARD, CEO of Woodard Events and Woodard Consulting
“I took the pledge and started implementing the Profit First system after reading Chapter One. By the time I was halfway through the book my business had already turned a profit.”
–BARRY MOLTZ, author of How to Get Unstuck –This text refers to the hardcover edition.
About The Author
MIKE MICHALOWICZ launched and sold two multi-million dollar companies and is co-founder of Profit First Professionals, a membership organization of accountants, bookkeepers and business coaches who teach the Profit First method. He is a former columnist for The Wall Street Journal, is a popular speaker and has shared his insights on business and entrepreneurship at TEDx, creativeLIVE, INCmty and others. He is the author of The Pumpkin Plan and The Toilet Paper Entrepreneur. His columns have appeared in Entrepreneur Magazine, Open Forum, and Harvard Business Review.
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 a small business 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. Mike has devoted his life to the research and delivery of innovative, impactful entrepreneurial strategies to you.
Mike is the creator of Profit First, which is used by hundreds of thousands of companies across the globe to drive profit. He is the creator of Clockwork, a powerful method to make any business run on automatic. He is the author of Fix This Next, an instant Wall Street Journal Bestseller, The Pumpkin Plan, Surge and The Toilet Paper Entrepreneur. His newest book, Get Different, teaches entrepreneurs how to creating marketing that can’t be ignored.
Today, Mike leads two new multi-million-dollar ventures, as he tests his latest business research for his books. He is a former small business columnist for The Wall Street Journal and business makeover specialist on MSNBC. Mike is a popular main stage keynote speaker on innovative entrepreneurial topics; and is the author of Get Different, Fix This Next, Clockwork, Profit First, Surge, The Pumpkin Plan and The Toilet Paper Entrepreneur.
Fabled author, Simon Sinek deemed Mike Michalowicz “…the top contender for the patron saint of entrepreneurs.”
Mike is also a guest lecturer for collegiate entrepreneurial programs such as Babson, Boston College, Columbia, Copenhagen Business School, Emerson, Harvard, Penn State, Pepperdine and Princeton. His books are in the core curriculum for entrepreneur students at Pepperdine, Carnegie Mellon, Stanford University, and universities across the country. His books have been translated into over 25 languages.