Profit First
What’s inside
Profit First by Mike Michalowicz talks about the most important aspect of a business. While it seems obvious that a business should make profit, most of them fail at this. Mike guides us to the best approach to managing finances. While at this, he also advises us regarding maximizing the profits earned. The book is a must-read for everyone, be it a businessman or an employee.
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Lesson 1. Introduction.
The number of new businesses has been skyrocketing in the last few decades. People mistake a business for a profit-making machine. While businesses are meant to create profit, quite a few of them actually do so!
An awful lot of businesses fail in the first 5 years. Even for that period, they run under debts. Just starting a business, while quite difficult on its own, is not enough. One has to earn profits as well. This is where things start to get difficult. While many of us know how to run a business, not many know how to make it profitable.
In Profit First, Mike Michalowicz teaches us just that! The traditional formula of profit, while easy, is not very effective. We’ll learn how to get a minimum profit consistently, and also understand how to maximize that profit over the years.
Let’s dive into it then!
Lesson 2. The Wrong Formula.
Every business, however big or small, has one aim - making profit. That should be the first and foremost priority while running a business.
The approach to understand profits has been simple for many years. Sell the most you can, subtract the expenses, and the rest is your profit. This is extremely easy to say and understand, although, not so much to implement.
Humans have a natural tendency to use what is available to them. The same applies to businesses. When we’ve resources available to us, we use them up. We don’t think of what’ll remain for profit after the expenses. This is the worst way to control finances! This was supported by Cyril Northcote Parkinson in the 1950s with Parkinson’s Law. It states that the amount of time required to complete a task increases in proportion to the amount of time available. The same principle applies to money as well.
The author presents us with another approach to making profits. Think about profit first, and then about the rest. This way, we are assured to get what we decide, and still get the work done with the rest. Once the profit amount is set aside, look at the remaining money as the only available amount. We’ll naturally work with it without any issues.
Lesson 3. Manage Chunks of Money.
We all have heard about breaking large work into smaller tasks at some point. It makes the work quicker and easier. The same principle is used for financial management too! How? Read
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Unlock Profit First Lessons!
- Lesson 1. Introduction.
- Lesson 2. The Wrong Formula.
- Lesson 3. Manage Chunks of Money.
- Lesson 4. Taking Small Steps.
- Lesson 5. It is Yours!
- Lesson 6. Increase Efficiency.
- Lesson 7. Paying Off Debts.
- Lesson 8. Application in Personal Life.
- Lesson 9. Conclusion.
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FAQs
In the summary of Profit First book, there are 9 key lessons. These lessons include:
- Lesson 1. Introduction.
- Lesson 2. The Wrong Formula.
- Lesson 3. Manage Chunks of Money.
- Lesson 4. Taking Small Steps.
- Lesson 5. It is Yours!
- Lesson 6. Increase Efficiency.
- Lesson 7. Paying Off Debts.
- Lesson 8. Application in Personal Life.
- Lesson 9. Conclusion.