If you have heard the words ‘Profit First’ mentioned in business groups and wondered what all the hype is, then read on….
Firstly, there’s the book. Profit First by Mike Michalowicz. If you’re lucky someone has lent it to you…. Don’t let it be one of those business books that you pop on your bedside table to gather dust. It’s an easy read, so pick it up and read it through once, then let it marinate for a few days. Then read through again, making notes and take action at the end of each chapter!
In Mike’s words, “What if, rather than you serving your business, your business served you? What if you could turn a profit from your very next deposit? And what if you had the power to guarantee that profitability?” If you’re like most business owners, making a profit is something that happens at year end when your accountant announces how well you’ve done and now you have tax to pay! You’re sitting there wondering where is this magical profit? Where’s the cash? How am I going to pay all of this tax when there’s no money in the bank!
In the book Mike explains why the traditional GAAP accounting model of Sales – Expenses = Profit doesn’t work. It doesn’t work because Profit is an afterthought here. For most small businesses, we get to Sales – Expenses and are relieved because we’ve managed to pay all of the bills. When do you get the rewards of owning your own business? Most of us feel like we’re working for the IRD! Profit First works on our existing human behaviours flipping the formula: Sales – Profit = Expenses. Where Profit is taken first (that’s actual cash!) and what’s left is what you have to work with to pay the bills. This is where the Profit First Professional comes in because the turn around is not as easy as it sounds. Taking the blinkers off and looking at your business with a critical eye is often confronting!
From the book, Mike set up ‘Profit First Professionals’. A group of certified specialists that can assist business owners in setting up Profit First and coach them through the roll out to improve profitability and manage their cash.
If you would like to check it our for yourself click on the link below to get the first 2 chapters for free 😊
