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.
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?
In his frank and entertaining manner, Michalowicz reveals why the traditional accounting formula of Sales - Expenses = Profit is not just contrary to human behavior, but a myth that locks you into a never-ending cycle of selling more yet profiting less.
Treating profit like an afterthought, secondary to growth, usually has the effect of running your business into the ground. Profit First takes a behavioral approach to accounting and flips the formula: Sales – Profit = Expenses. Just as one of the most effective weight-loss strategies is to limit portions by using smaller plates, Machalowicz shows how to take profit first and spend only what remains as expenses. With this one change you will instantly transform your business from a cash-eating monster to a profitable cash cow.
• Following four principles can simplify accounting and make it far easier to manage a profitable business by just looking at bank account balances.
• Taking your profit first both enforces frugality and inspires industry-changing innovation.
• A small, consistently profitable business can be worth much more than a large business struggling to sustain itself.
• Businesses that attain early and sustained profitability have a better shot at achieving long-term, stratospheric growth.