Profit First- An Interview With Mike Michalowicz

Today we discuss a unique method by which you can guarantee your business will always have a profit (even from day 1). You'll never miss having a profit because you take your profit first. My guest is Mike Michalowicz. Mike is the successful entrepreneur behind three multimillion dollar companies. He is the author of The Pumpkin Plan, Surge, and The Toilet Paper Entrepreneur, which BusinessWeek deemed "the entrepreneur's cult classic." He is a former small business columnist for The Wall Street Journal and a former MSNBC business makeover expert. An advocate for entrepreneurs, Mike says his purpose in life is to eradicate entrepreneurial poverty. Click here to download or listen to this episode now. Tip of the Week I'm a little late to the Instagram party, but my tip of the week is an Instagram tool I find to be a big help, it's called InShort Video Editor. This app is great for editing videos on your iPhone and turning them into smooth, seamless Instagram stories.  Check out InShort Video Editor in the app store today. Spiritual Foundations An indicator of someone's character and integrity is how they handle their possessions. Paul stated in Philippians 4, "I know how to get along with humble means, and I also know how to live in prosperity. In any and all circumstances, I have learned the secret of being filled and going hungry, both of abundance and suffering need. I can do all things through Him who strengthens me." Paul was actually talking about wealth in this circumstance. He was saying, "I've had a lot and I've had very little, and I've learned to be content in both circumstances. I can handle either situation through Christ who strengthens me." Powerful advice! (3:00) Feature Presentation "Profit First- An Interview With Mike Michalowicz" Here are some snippets from our conversation: The book Profit First revolutionized my thinking about my business. – How to change your CPA's thinking about business and pocket profits like never before. (4:00) Profit First is a new approach to cash management. – Discover how an old approach to cash management brought to business for the first time will increase your profits. (5:00) Sales – expenses = profit. – Why this flawed definition has negatively impacted so many businesses. (5:25) Accounting says profits come last. – How to change one simple formula and start making a profit immediately. 83% of small businesses are not profitable. – Uncovering why entrepreneurs get so many things right but continue to make no profit. (5:40) Is there a flaw in the formula? – How the Profit First principle will change your business (and your life). (6:01) Sales – profit = expenses. – What to do every time you make a sale (truth is, practically no one does this). (6:45) Sell, hide, pay. – Why this sequence works every time and guarantees you profits. (No, I'm not advocating illegal activity.) (7:09) The 20/80 rule you've never heard. – How logic, emotions, and habits impact your business profits. (7:35) Business says, "The more I grow, the more I spend." – How to break this popular no profit system. (8:00) Profit First leaves you less money for your expenses. – Why this forces you to make harder choices that lead to the appropriate decisions. (8:52) Reverse engineer profits. – Discovering the secret for overcoming negative inertia and creating the habit of making a profit. (9:02) Tony Robbins, "The definition of an entrepreneur is someone who knows how to make enough money to cover their mistakes."  (9:10) The mindset of just making more money. – What entrepreneurs do when they're not profitable and why it's such a bad idea. (9:29) Too much month at the end of the money. – Why continuing with a flawed money management system is insane.  (9:37) How Profit First forces you to define the path to profitability. – Why revealing outcome-based thinking is powerful. (10:30) If you can't pay your bills you never could afford your bills. – How we fall into the trap of stealing (and think it's OK). (10:54) How to run your business in a disciplined and appropriate fashion. – Why Profit First is required reading for every entrepreneur. (11:06) Is Parkinson's Law impacting your profits? – What naturally happens when your resources increase, and how to break this unprofitable habit.  (11:36) Resources Mentioned In This Episode Philippians 4 InShot app The Pumpkin Plan Profit First The Toilet Paper Entrepreneur Mike Michalowicz.com Mikemotorbike.com At Mike's site you'll have access to free chapter downloads, his Wall Street Journal articles, blogs, and podcasts. How To Help Subscribe to the show through Apple Podcasts and give us a rating and review. Make sure you put your real name and website in the text of the review itself. We will mention you on this show. Get The Transcript Right-Click and "Save As" to Get the PDF Transcript.