Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine

To grow the biggest and the fastest, you need to be the best at one thing you do. And to become the best at something, you need to first determine what you are best at and do it a whole lot better. To get there, you take your profit first and the answers to being the best at something will reveal themselves.

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Ernie is at point A (which is really called crisis) and he wants to get to point B (which is his vision for our future). The thing is, as is the case for most of us, his vision is very vague. Instead of a clear statement of his products or services and the clients he wants to serve, Ernie might have a goal like, “I want a lot of money and need reli

1 percent allocation for the PROFIT account (Why 1 percent? You’ll find out in the next chapter), 50 percent for OWNER’S COMP, and 15 percent for the TAX account. Use quarterly adjustments to step up to higher percentages and nudge your business closer to the TAPs recommended in this book.

Profit must be baked into your business. Every day, every transaction, every moment. Profit is not an event. Profit is a habit. Do you know the saying “Revenue is vanity, profit is sanity, and cash is king”?

INCOME PROFIT OWNER’S COMP TAX OPEX

After setting up this new checking account at your bank, nickname the account PROFIT, and from this moment forward from any deposit you put into your normal checking account, transfer 1 percent of that deposit into your PROFIT account. Then proceed with your business and processes and money management as you have in the past. Just add to the PROFIT

The perfect size for your business? It will happen naturally, when you take your profit first. You will reverse engineer all the elements of your business, and as Fried says, “the right size will find you.”

Parkinson’s Law triggers two behaviors when supply is scant. When you have less, you do two things. The first is obvious: you become frugal. When there is less toothpaste in the tube, you use less to brush your teeth. That is the obvious part. But something else, far more impactful happens: you become extremely innovative and find all sorts of ways

Here are the five checking accounts you need to set up: INCOME PROFIT OWNER’S COMP TAX OPEX