64. Book Review: Profit First
November 29, 2019
Hey, are you wondering how well you’re doing with your bookkeeping? Maybe you’re at a total loss of where to begin. Maybe you’re not sure how well you’re actually doing. You just need to know the next steps to take.
During a bookkeeping strength assessment, I work with business owners one on one for about 30 minutes and identify what their next step needs to be. I’ll lead the conversation by asking some open-ended questions and then ask ten laser focused questions so I can pinpoint exactly what you should do next and how strong you are with your bookkeeping. Business owners find this to be the boost of confidence they need to tackle their bookkeeping head on.
To get on my calendar for a free session, you can email me at firstname.lastname@example.org or message me on Instagram @lydia.miller.mba. Now on with the show.
Welcome back to the podcast!
We are at the end of our series on profit! Today is a bonus episode because it is a book review of Profit First by Mike Michalowicz.
Just to recap the series, in episode 60 we talked about what is profit and how to know if your profitable. 61 is about how you become more profitable. 62 is about what to do with your profit. 63 is what kills your profits.
Remember, profit is defined as revenue minus expenses.
The cash you have left over is the profit. Well, according to accounting, not according to Profit First.
The premise of Profit First is that it’s a cash management system that uses our natural instincts instead of the ‘unnatural’ ways of traditional accounting.
You set up 5 bank accounts. One for profit, taxes, owners pay, deposits and operations. All of the money you make first goes into the deposits account then you divide out that money based on percentages. So 25% may go into taxes, 50% may go into owners pay, 15% may go into operations and 10% may go into profits giving you 100%.
The goal is the save cash for profits FIRST before you start paying out expenses for your business. If you have a hard time not overspending, then this is a great system. The less money you have in your operations account, the less likely you are to be spending more than you have or cutting into your profit or savings.
I do love this system because it helps you manage your cash well which is really difficult and the number one cause of businesses to fail.
The book is a fairly quick read I would say. It does get a little repetitive and I found myself skipping over parts that I thought they had already covered well enough.
Overall though, I would highly recommend doing this if you are struggling managing the cash in your business and you want to do a better job with this in 2020.
Are you still struggling with profitability? Maybe you know you’re not profitable, but you need some help in getting a game plan together on how you can become more profitable.
I’d be honored to work with you. To get started, email me at email@example.com with the problem you’re having and we can discuss the best way to get to a solution in a bookkeeping strength assessment call.
If you are ready to use your numbers to help your business, please subscribe so you will be notified when the next episode drops.
I would love to connect with you. You can find me on Instagram @lydia.miller.mba and always by email firstname.lastname@example.org.
So until next time, go, make it happen.