Description
Author: Mike Michalowicz
PDF | 2MB
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, that 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:
- Profit First Formula: The book introduces the “Profit First” formula, which prioritizes profit by deducting it from revenue first, before allocating the remaining funds to expenses.
- Banking System: It recommends a simple but effective banking system involving multiple accounts to allocate money for profit, taxes, owner’s pay, and operating expenses, helping to control spending and ensure profitability.
- Cash Flow Management: Michalowicz offers practical strategies for improving cash flow management, emphasizing the importance of cash reserves and reducing financial stress.
- Behavioral Change: The book addresses the psychology of money management, encouraging business owners to change their mindset and habits to prioritize profit.
- Step-by-Step Guidance: It provides actionable steps and exercises, making it easy for readers to implement the Profit First system in their businesses.
- Case Studies and Real-Life Examples: The book includes numerous case studies and success stories from businesses that have successfully implemented the Profit First system, illustrating its effectiveness.
- Focus on Small Businesses: Tailored specifically for small and medium-sized businesses, the strategies are practical and adaptable to different industries and business sizes.
- Additional Resources: Michalowicz offers additional resources such as templates, tools, and online support to help business owners implement the system effectively.
- Easy to Understand: The book is written in a conversational and engaging style, making complex financial concepts accessible to readers without a financial background.
- Long-Term Financial Health: Emphasizes the importance of building a sustainable and profitable business model, rather than just focusing on short-term gains.
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