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Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine Hardcover – February 21, 2017
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“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
About the Author
- ASIN : 073521414X
- Publisher : Portfolio; Reissue edition (February 21, 2017)
- Language : English
- Hardcover : 224 pages
- ISBN-10 : 9780735214149
- ISBN-13 : 978-0735214149
- Item Weight : 14.4 ounces
- Dimensions : 6.21 x 0.84 x 9.23 inches
- Best Sellers Rank: #707 in Books (See Top 100 in Books)
- Customer Reviews:
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Top reviews from the United States
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How much you get out of this book will probably depend entirely on 1) your personality and 2) the health of your business. If, for example, your business -- and your sanity -- is on financial life support, or you really struggle with maintaining spending discipline in your business, then this book really can be useful. He lays out a fairly meticulous case, early on, that many entrepreneurs are so fixated with growth that they fail to see the opportunity for profit right in front of them ... and thus find themselves sitting on the brink of ruin despite having a massive cash flow.
The solution, he explains, is to essentially set profit (and taxes) at non-negotiable levels and bend the rest of the budget to accommodate that. To get there, he prescribes what is basically a business-version of an envelope system. (In my head, I immediately thought, "this is basically Dave Ramsey for businesses.") By piecing out your various expenditures among separate bank accounts -- his version of envelopes -- you can start to re-prioritize your spending, moving toward a business that is better balanced for making a profit. In the later chapters, he gets more specific about percentages and how to nudge toward a healthier balance without upsetting all the moving parts, and people, of an existing business. There are elements of the book that feel more like filler than substance, but I can also see where despairing readers may need some of that cheerleading, and I give the author props for having some decent support materials over at his website to help implement the book's advice.
There is still another class of entrepreneur, though, and that's one who is disciplined, purposeful, and has a steady vision for their business. Those sorts of people are probably not going to get as much out of Profit First. They may glean some things (including, perhaps, some affirmation that they're on the right track) but a lot of the book is going to be, at best, not for them. At worst, some people may look at the Profit First system as an unnecessary, time-consuming hassle of financial gatekeeping, not unlike how an individual who uses their credit card responsibly and with discipline might decide the extra financial hurdles of the Dave Ramsey cash-only envelope system isn't for them. Do some people benefit from having their assets in seven accounts across two different banks, the way Profit First suggests? Sure. Does everyone? I'm not so sure about that at all.
So is Profit First for you? In my opinion, the best way to figure that out might be to go and check out some of the author's resources on his site first, and see if that resonates with you. The book may have particular value if you're in a place where you're generating a lot of revenue but you don't have much to show for it. On the other hand, if you're a meticulous soul who has a clear grasp of where your business revenue should be going -- and you've got the self-discipline to get there -- I would be wary about getting this book unless it was deeply discounted.
A friend/colleague recommended it to me, and I ordered it on that gateway drug, Amazon Prime. It came that night (!), and I devoured it like a T Rex that hadn’t eaten in a year.
It was an easy thing for me to commit to because I already had a separate tax account and knew how that benefitted me. It only made sense that others would be a good idea as well. I travel a lot for my work, and I’ve really struggled with balancing that reimbursement.
I own an educational consulting business, and I've really struggled with handling the ebb and flow of the money. I make 70% of my income in two months out of the year, and that's always been a stress to me.
Friends, the answer is in this book. It took me less than half an hour to set it all up, and it's as smooth as a freshly shaved leg with really good moisturizer on it.
The biggest difference, really, isn't even in the numbers: the biggest difference for me is in the weight off of my mind. I KNOW what will happen. I don't have to think about everything all of the time (Where will this go? When should I pay that? Okay, if I they pay that invoice, I can pay for this upcoming travel.. and on and on).
It's no coincidence the name Michael means "like unto God." His ideas have transformed my business - quite literally overnight as I was reading at 3am. Is a finance crush a thing???
This book is for you if you:
- run your own business
- have thought about starting a business
- struggle with cashflow
- feel like something is always chasing you in your business
- feel like you're never ahead, you can never breathe
- want a super simple way to end that in manner of Charlie from Charlie's Angels ("But I took them away from all that, and now they work for me...")
Seriously, read the book. Read the book. Do the exercises. Implement the plan. You will have a financial awakening that will be the best thing since, I don't know, something really good.
A must, must read.
income minus expenses equals profit and therefore profit minus expenses equals income.
viola, you've read the book.
The only truly actionable advice fond inside is as follows: if the profit you take is unsatisfactory, take a tiny bit more now and a little bit more later and it will add up.
That amazing gem is backstopped by enough thought to fully flush out a bi-fold brochure, but somehow spread across some 150 pages.
Some of that pap that fills the rest of the space is downright terrible advice about how to cut overhead down to a nub, fire your employees and your "bad" customers.
In the end it's one tiny nugget of an obvious idea surrounded by fluff that is spiked with downright bad advice.
It's a sales brochure for Mike's misguided services.
Most books of this stripe AT LEAST put some punch into their "You TOO can be rich soon!" anecdotes. The personal and business stories in here are truly bad, even for inspirational business books.
Awful. Truly Awful.
Top reviews from other countries
I trained with KPMG Chartered Accountants in the 80's so I'm familiar with the idea that Revenue - Expenses = Profit, but the simple idea of rewriting this as Revenue - Profit = Expenses, seems so simple and yet it's a huge paradigm shift.
I bought the book initially on Audible, read it in two days, then bought the hard back on Amazon, and then signed up for the course with Creative LIve. I also wrote to Mike with a question, which he responded to within hours, twice. The one thing that surprised and delighted me this morning was that someone who I perceive as being an expert, could be so approachable, and so freely respond to my question, with no agenda. I feel extremely grateful to Mike for his work and his prompt, thoughtful reply. I've been recommending the book to all my friends and fellow entrepreneurs. It is now one of my favourite finance books. A must read for anyone in business.
Some books are life-changing, and I think this is one of them. I loved it. Because, like many business owners, I often don’t really know what’s going on with my numbers... and that’s a problem.
Maybe this sounds familiar to you: “You’ve done great! You’ve made a profit of [lots of moolah] after taxes and expenses!” And you do a little jig, because how cool is that?
Only... where is that money? It’s certainly not sitting in a fat pile in your bank account, is it? So you look at your accountant, perplexed, and say, “Wait. I’ve made all that profit... but where is it?”
“Oh, it’s gone,” she says airily. “You’ve spent it.”
“What? How can it be profit then?”
At which point your head explodes.
Well, this is the book you need to read. It helped me understand exactly what's going on.
The author has been in exactly our position – and much, much worse. He’s gone from millions in the bank to his last few quid – then lost that. And he’s been as confused as the rest of us.
So he wrote this book to come up with a system that works for real humans. Because (sorry accountants!) most of us business owners do not and will not ever think like accountants. We will not sit for hours poring over statements and spreadsheets and profit and loss calculations. We just won’t.
So the author came up with the Profit First system. My accountant tells me it’s the accounting system under another name, but that’s the point. He uses normal-people words, ideas, and examples. He takes accounts and puts them in a format I can understand – and gives me a system I can not only understand but will actually use.
When you’ve read the book, do the things the author tells you to do. Do the instant assessment of your business. It’ll hurt, but only briefly – then you can start to fix things. This is one of those things you won’t want to do because it’s scary. But once you face the music and know exactly what’s what, it’s like a huge weight has been lifted.
This is a beautifully simple book that takes a complicated subject and makes it easy to understand for those of us who can't get their heads around traditional accounts.
I get the basic premiss: Put the focus on profit. Know what your profit really is, after expenses, so you don't over-spend and go from elaborate spending to scrimping and saving, backwards and forwards...
But I think I prefer the simpler system, which is: Constantly try to save more money. Reduce expenses as low as they can go. It's working for me anyhow.
In short: If you're not prepared to do some pretty radical stuff involving your finances and bank accounts, don't bother getting the book.
This year am committed to understanding and managing my finances and making a profit in my business.
By staying open and listening to my heart and taking the first steps, reading Profit First and watching the YouTube videos...and opening my Profit First account...I feel confident in achieving my heart's desire.
Mike has written a gem of a book which shows you how easy it is to manage your finances. I am excited and will be 're-reading and applying the techniques and mind set shifts as I go along.
Highly recommend this book if you are looking for ways to reduce your debt and live a profitable and fun life, without stress or struggle. Thank you.
Finance has always been one of the biggest challenges of growing a business and I've always found it way too complex.
The other big problem is that all you focus on is making profit, and you only find out if you've made a profit retrospectively.
What I love about the Profit First system is that you focus on ensuring you make a profit from day one.
We've also believed in the idea that you need to re-invest to build the business and while that has been a success, I can now see that we could have continued to grow the business, provide a great service to our clients and achieve what we wanted, while still making a healthy profit along the way.
I honestly wish I'd read this 10 years ago... It's a top 10 must read business book for me and I've read a lot.
Focus on making a consistent profit and the rest becomes a great deal easier...