Profit First

Profit First is one of those books that completely aims to change your perception on well-established accounting practices and challenges what most businesses do when managing cash flow.

Mike’s ideas focus on putting the business and the business owner first when it comes to accounting. The general concept implies that profit is considered when dealing with income and expenses for the businesses, rather than expecting profits to come from the “leftovers”. Conventional accounting uses the logical formula:

Sales – Expenses = Profit

The problem is, businesses are run by humans, and humans aren’t always logical. 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, this book 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.

With dozens of case studies, and practical, step-by-step advice, this book give entrepreneurs a game-changing roadmap to make money they always dreamed of.

Profit First is Recommended Reading for Navigate Academy Module 56: Building a Better Business through Budgeting.