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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 4 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 roadmap for any entrepreneur to make money they always dreamed of.
From the Publisher
THREE STEPS TO PERMANENT PROFITABILITY
CHANNEL BEHAVIOR
Most entrepreneurs run their business via “login and see what you’ve got – bank balance accounting.” If you do that, too… congratulations! Profit First was made for you.
Profit First is a cash management system that works with your bank accounts. The do-it-yourself process pre-allocates money to its intended use before you spend it. When you log into your bank, you will know what money is available for what purpose.
REMOVE TEMPTATION
Just like the 401k has been the greatest personal savings mechanism in US history, Profit First leverages the same “pay yourself first” principle. First, your business will deduct its profit and transfer the money away from your primary bank to prevent the business from “borrowing from it.”
With the temptation to run your business from its profits removed, you will automatically operate your business in a fiscally sound manner.
REWARD QUARTERLY
As profit accumulates, the owner(s) of the business will take a quarterly profit distribution. The profits are not “plowed back” or “reinvested” into the business – or they should be reclassified as expenses. Instead, the profits are used to reward the owner(s).
Some businesses have debt, of course. Using the Profit First system, portions of profit distributions can be used to pay off chunks of debt, but some must remain to reward the owner(s). With Profit First, you win. Every quarter.
ABOUT MIKE MICHALOWICZ
After building and selling two multi-million dollar businesses, Mike Michalowicz (pronounced mi-‘kal-o-wits) started his third company and… lost 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 entrepreneurial strategies to his readers.
Mike is the creator of Profit First, which is used by over one million companies across the globe to drive permanent profit. He is also the creator of Clockwork (small business systems), Fix This Next (small business strategy), Get Different (small business marketing), The Pumpkin Plan (small business growth), and All In (small business teams).
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YOUR GUIDE TO ENTREPRENEURIAL SUCCESS
I want to do the RIGHT things! I want to MARKET better than ever! I want to get my TIME back! I want to GROW fast and strong! I want to LEAD an unstoppable team!
ASIN : 073521414X
Publisher : Portfolio; Reissue edition (February 21, 2017)
Language : English
Hardcover : 224 pages
ISBN-10 : 9780735214149
ISBN-13 : 978-0735214149
Item Weight : 2.31 pounds
Dimensions : 6.2 x 0.8 x 9.2 inches
Customers say
Customers find the book provides useful information and a practical approach to business finances. They find it easy to understand and implement, with clear steps to follow. Many readers consider it a worthwhile purchase that helps them make a healthy profit. The author’s humor and relatable storytelling make the book enjoyable to read.
