Metadata
- Author: Mike Michalowicz
- ASIN: B01HCGYTH4
- ISBN: B0CLYML7W2
- Reference: https://www.amazon.com/dp/B01HCGYTH4
- Kindle link
Highlights
We think that if we can just work harder, longer, better—if we can just hold out—something good will happen one day. Something big is just around the corner, right? Something just like magic will wipe away all of the debt, financial stress, and worry. After all, don’t we deserve that? Isn’t that how the story is supposed to end? No, my friend, that’s only in the movies—nothing like what we experience in real life. — location: 171 ^ref-59667
eight out of ten businesses fail, and the number one reason they fail is lack of profitability. — location: 206 ^ref-57804
I patted myself on the back for hiring more employees, for moving into a fancy-schmancy office space, for making big sales. The truth is, I used all that as an excuse to cover up one ugly fact: my business had never once posted a profit. — location: 220 ^ref-38981
I continued to sink month in month out. Year after year. Constant stress. — location: 223 ^ref-24299
For the longest time, I thought I was flawed, that my brain was messed up. It took me a long time to ask, what if I’m not the problem? What if the system I have been told to follow is flawed? — location: 227 ^ref-17980
Relying on traditional accounting methods to grow profitability is the equivalent of telling you to jump off a cliff and flap the living crap out of your arms. — location: 238 ^ref-8238
Sell as much as you can, then pay the bills, and what is left over is profit. Here’s the problem: there are never any leftovers. — location: 244 ^ref-43889
You needed to experience those years to get you where you are today, — location: 300 ^ref-28458
Fools never seek out answers. Fools never realize there is a different way, even when it’s staring them in the face. Fools don’t admit they need to change. — location: 302 ^ref-51100
The majority of the businesses that survive are racking up debt, and their leaders are perpetually stressed. Most entrepreneurs are living a financial nightmare, — location: 328 ^ref-34162
Didn’t you start a business so you could be your own boss? Now it looks as though this monster is the boss of you. — location: 344 ^ref-37719
Mindlessly throwing money at start-up companies wasn’t even in alignment with my values about money; — location: 378 ^ref-11189
Without enough money, we are slaves to the businesses we launched. — location: 428 ^ref-38302
Money amplifies who we are. — location: 430 ^ref-4091
It was a check-to-check lifestyle, but sustainable—as long as sales were sustained and did not dip. — location: 438 ^ref-15283
Big deposits feel great, but they are irregular. — location: 444 ^ref-22945
Most business owners try to grow their way out of their problems, hinging salvation on the next big sale or customer or investor, but the result is simply a bigger monster. — location: 468 ^ref-61955
The perfect size for your business? It will happen naturally, when you take your profit first. — location: 474 ^ref-49455
Profit is always within sight, but never attainable. — location: 478 ^ref-16256
Profit is not an event. Profit is a habit. — location: 484 ^ref-60661
You can’t grow out of your profit problem. You need to fix profit first, then grow. You must figure out the things that make profit and dump the things that don’t. — location: 501 ^ref-35849
The Survival Trap is not about driving toward our vision. It is all about taking action, any action, to get out of crisis. — location: 563 ^ref-40826
Sustained profitability depends on efficiency. You can’t become efficient in crisis. In crisis, we justify making money at any cost, right now, — location: 579 ^ref-23948
To successfully run a profitable business, we need a super simple system to manage our cash, one we can understand within seconds, without help from an accountant. We need a system that is designed for humans, not Spock. — location: 652 ^ref-40146
Established habits die hard, so why try changing your habits? Instead, use a system that works with your existing habits. — location: 683 ^ref-58074
Monster businesses have killed marriages, torn apart families, and for some entrepreneurs, decimated any hope for the good life. — location: 694 ^ref-59531
Here’s the deal. There is only one way to fix your financials: by facing your financials. You can’t ignore them. You can’t let someone else take care of them. You need to take charge of the numbers. But there is good news—the process is really, really simple. — location: 704 ^ref-12336
The solution is not to try to change our ingrained habits, which is really hard to pull off and nearly impossible to sustain, but instead to change the structure around us and leverage those habits. — location: 739 ^ref-15891
As the business grew, I started to spend. The more money came in, the more I spent, and I believed—scratch that, I was convinced—that all expenditures were necessary. — location: 748 ^ref-5798
The key is to get started so both the savings accumulate and the lifestyle adjusts to meet their residual pay. — location: 769 ^ref-39605
And that’s when it hit me—what if I took my profit first? — location: 776 ^ref-14063
Similarly, if your client gives you a week to turn around a project, you’d likely take the whole week—but if she gives you just a day, you’ll make it happen in a day. — location: 812 ^ref-11966
You need to intentionally make less toothpaste (money) available to brush your teeth (to operate your business). — location: 829 ^ref-32710
We place additional significance on whatever we encounter first. — location: 836 ^ref-37437
When profit comes first, it is the focus, and it is never forgotten. — location: 851 ^ref-64929
As you implement Profit First, you are going to use the powerful force of “out of sight, out of mind.” — location: 857 ^ref-49494
establishing a rhythm will also be a great indicator of overall cash flow. — location: 865 ^ref-41539
the fastest, healthiest growth comes from businesses that prioritize profit. — location: 879 ^ref-15933
Businesses that plow back their profits aren’t truly profitable; — location: 880 ^ref-23613
When you take your profit first, your business will tell you immediately whether it can afford the expenses you are incurring; it will tell you whether you are streamlined enough; it will tell you whether you have the right margins. — location: 883 ^ref-19612
Each of these accounts has a different objective: one is for profit, one for owner compensation, another for taxes, and another for operating expenses. — location: 906 ^ref-13482
Always, always allocate money based upon the percentages to the accounts first. Never, ever, ever pay bills first. — location: 909 ^ref-10500
Your job is to stick with this small step for a while. Watch your profit accumulate. Yes, it is notably small, but it is profit nonetheless. — location: 952 ^ref-55584
Profit First is a cash-management system. — location: 1176 ^ref-24420
The goal here is to get you to your Real Revenue number. This is the real money your company makes. — location: 1218 ^ref-50197
Real Revenue is different from gross profit, in that Real Revenue is your total revenue minus materials and subcontractors utilized to create and deliver the service or product. — location: 1225 ^ref-29602
Working on the business does not mean hiring a bunch of people to do the work and then spending all the livelong day answering their never-ending questions about how to do the job (the job you used to do). Working on your business is about building systems. Period. — location: 1547 ^ref-15879
my business serves me; I do not serve my business. — location: 1559 ^ref-60763
Paying yourself next to nothing for hard work is servitude. — location: 1560 ^ref-4702
Ironically, getting back in your business is the best way to create systems. And as you put the systems in place and your revenue increases to accommodate them, you can slowly plug in great people to implement those great systems. — location: 1569 ^ref-27476
The bottom line is this: don’t cut your salary to make the numbers work. The goal of every business is health, and that is achieved through efficiency. — location: 1571 ^ref-36309
making yourself the sacrificial lamb does not promote efficiency; it hinders it. — location: 1573 ^ref-61419
you started your business in part to achieve financial freedom. So if that is true, shouldn’t your company pay your taxes for you? Hellll, yeah. So that is exactly what is going to happen. — location: 1589 ^ref-42629
the only way they could reap the benefits of entrepreneurship would be to increase their salaries a little bit each year. — location: 1647 ^ref-20191
As you find ways to increase profitability, or even if you don’t, your competition is doing the same. — location: 2460 ^ref-23498
Profit is a slippery animal. When profit margins are big, usually in excess of 20 percent, — location: 2471 ^ref-59259
focusing solely on top line thinking (sales, sales, sales!) does not lead to profitability. — location: 2478 ^ref-6434
Efficiency increases your profit margins, or the amount of money you earn as profit on each product or service you offer. — location: 2485 ^ref-8442
achieve greater efficiency first, then sell more, then improve efficiencies even more and then sell even more. — location: 2487 ^ref-47518
you need to look at efficiency in every aspect of your business. — location: 2490 ^ref-27826
You want to duplicate your best clients, those who have a consistent need; and in turn, you want to reduce the variety of things you do to the fewest that will best serve your best clients’ needs. — location: 2492 ^ref-52621
want you to set a massive goal for yourself. Look at every aspect of your business and determine how to get two times the results with half the effort. That’s a biggie, so I will say it again: How do you get two times the results with half the effort? — location: 2496 ^ref-33745
To double the results with half the effort is a big goal that forces big thinking, and it brings about small and big progress—all of which goes to the bottom line. — location: 2509 ^ref-46017
Doing more with fewer resources has had a significant impact on my businesses. — location: 2511 ^ref-45597
You don’t have to slash and burn the moment you put down this book. You can take it slow. Just get started. — location: 2561 ^ref-38240
For almost any B2B business in the world, landing a hundred clones of its best client would put it at the front of the pack. It would dominate. — location: 2598 ^ref-3720
You get stuck in the Survival Trap and end up not doing a very good job at any one thing. — location: 2646 ^ref-4596
Selling more is the most difficult way to increase profits, because in the best-case scenarios, the percentages stay the same; and in the worst-case more common scenarios, expenses generated to support sales increase faster, resulting in smaller percentages and a smaller profit margin. — location: 2656 ^ref-47181
Focusing on one aspect of your business (one that benefits your best customers), challenge yourself to figure out how to get two times the results for half the effort. — location: 2662 ^ref-37852
identify your weakest clients. Fire the weakest links. — location: 2664 ^ref-4957
“When in doubt add an account.” — location: 2676 ^ref-34405
Are you making your biweekly allocations? — location: 2684 ^ref-56510
Are you amassing some profit, no matter how small? — location: 2684 ^ref-28030
Have you experienced a few profit distributions? — location: 2684 ^ref-51816
Are you participating in some form of accountability? — location: 2685 ^ref-7974
The stuff I taught you in the beginning of this book was working well, but there were certain times I still needed to do the accounting work to understand the financial health of my business. — location: 2690 ^ref-43316
if you know exactly how much cash is flowing into your business at any given time, you can make better decisions about where you need to focus your efforts. — location: 2698 ^ref-12972
At a certain point, leaving 50 percent in your PROFIT account to act as a rainy-day fund is not prudent because the money flow is a little unpredictable. — location: 2704 ^ref-18042
Every business should have a three-month reserve, meaning that, if not a single sale came in, all costs could still be covered for three months (a quarter). — location: 2706 ^ref-34658
Take your monthly required personal income and divide it by two because you are getting paid twice a month. — location: 2848 ^ref-5294
Raising money is a risky endeavor. I generally discourage it, unless you have an extremely high confidence that an investment of money will bring in a lot more profit. — location: 2872 ^ref-55717
For each full-time employee, your company should generate Real Revenue of $150,000 to $250,000 (ideally more, but this is the minimum). — location: 2887 ^ref-43745
cheap labor is less costly but also has a smaller impact on revenue. — location: 2897 ^ref-35044
Choose one of the advanced tactics or strategies detailed in the chapter and add it to your to-do list for six months from now. — location: 2950 ^ref-64595
The path to financial freedom is paved with simple, small habit changes that become systematized and apply to both your business and personal finances. — location: 3002 ^ref-31546
If you own a business, your personal financial health is in lockstep with the financial health of your business. — location: 3004 ^ref-54942
Face the music. — location: 3009 ^ref-41060
If you have any debt at all, stop accruing more. — location: 3011 ^ref-48405
Establish a personal Profit First habit. — location: 3012 ^ref-20517
Set up your “small plates.” Create five foundational accounts, multiple Day-to-Day accounts and Big Event accounts. — location: 3015 ^ref-2851
It’s common for us emotional humans to give up the stuff we can no longer afford (or couldn’t afford in the first place) by small degrees. We cling. — location: 3072 ^ref-36004
To me, paying down debt is winning, and winning is fun. — location: 3111 ^ref-64917
Rewards are an important feature of Profit First. We must celebrate. Many experts will tell you to eradicate debt only. — location: 3114 ^ref-48168
After you own your cars and home outright and have wiped out debt from every nook and cranny of your life, 100 percent of the profit disbursement goes to you. And this time the party had better be legit. — location: 3122 ^ref-36198
According to Parkinson's Law, if you have ten dollars in your pocket, you will spend ten dollars. As our income increases, Parkinson’s Law takes over and we spend every extra penny we earn. — location: 3126 ^ref-42680
You need to accumulate cash—lots of it—and that means no new cars, no brand-new furniture or crazy vacations. — location: 3129 ^ref-61309
The more cash you can collect, the better, because at a certain point money starts earning you substantial money, all by itself. Money yields interest and returns from investments. — location: 3135 ^ref-20704
But the frugal lifestyle is not the same as a cheap lifestyle. — location: 3145 ^ref-45725
Remember, well-dressed poverty is still poverty. — location: 3148 ^ref-40796
The idea of the Wedge is to only gradually (and mindfully) upgrade your lifestyle as your income increases. — location: 3151 ^ref-57452
So they adjusted the percentage until they achieved a balance with their PROFIT account allocation. They discovered that 9 percent in profit is high enough to make a real difference in their rainy-day and celebration funds, but low enough that it did not hinder their current strategy for market domination. — location: 3268 ^ref-24704
When profit comes first, your business will automatically show you the path to growth. — location: 3301 ^ref-4245
Money is made by efficiency—invest in it. — location: 3318 ^ref-460
Using a credit card to cover what you can’t afford is also a red flag that your expenses are too high. — location: 3332 ^ref-47212
The actual charges on your credit card and the interest and credit card fees can be expensed, but not your payments to pay down your cards. — location: 3358 ^ref-38596