{"version":1,"type":"rich","provider_name":"Libsyn","provider_url":"https:\/\/www.libsyn.com","height":90,"width":600,"title":"Being Profit First with Mike Michalowicz","description":"Brian chats with Mike Michalowicz, the mastermind behind Profit First Professionals and author of books for entrepreneurs and small business owners. Mike shares his experience growing several multi-million dollar companies only to lose almost everything. He then details how hitting rock bottom became the foundation upon which he built the Profit First method, which has yielded him 14 years of profitable quarters and is now used by more than 500,000 small businesses.   Episode Highlights Make profit a priority. The Profit First method developed by Mike rewrites the classic accounting formula from Sales - Expenses = Profit to Sales - Profit = Expenses. Why? Because when something is a priority, it doesn\u2019t come last, Mike noted. \u201cIt\u2019s human nature that when something comes first, it\u2019s the priority. When something comes last, it\u2019s the ma\u00f1ana syndrome,\u201d he said. \u201cThat\u2019s when I said, \u2018I think the formula is flipped.\u2019\u201d Profitability brings stability. One of the problems with the original profitability formula is that increasing sales isn\u2019t always the driver of sustainable growth, Mike said. More sales can translate to more stress, more dysfunction, and less organization. \u201cIt starts actually causing a business to crumble because it doesn\u2019t have runway,\u201d Mike said. Profit, on the other hand, can bring stability to an organization by buying a small business owner time. When small businesses have one to two months in cash reserves, they don\u2019t have to take on stressful panic sales. \u201cWhen a business takes its profit first, they actually grow faster, profit-wise, than their contemporaries,\u201d Mike said. \u201cThey are much more calculated in their growth.\u201d Don\u2019t change yourself. Channel yourself. Since flipping the formula, Mike has achieved 48 profitable quarters in a row. That\u2019s because the revised formula is designed to manage human behavior. Or as Mike said in the episode, \u201cWe can\u2019t change ourselves. We channel ourselves.\u201d Mike learned this lesson first for exercise. He put his gym shoes on top of the toilet seat as an intervention, so he would have to pick them up first thing in the morning. For business owners, the Profit First method sets up a similar intervention in the owner\u2019s bank account. \u201cBy pre-allocating business to these different accounts, or envelopes, now you know what money is intended for what purpose, and you behave within the confines of what\u2019s available,\u201d Mike said.   Resources + Links Mike\u2019s books: Profit First, Clockwork, The Pumpkin Plan, Fix This Next, The Toilet Paper Entrepreneur, Surge, Get Different: Marketing That Can\u2019t Be Ignored! Profit First Professionals https:\/\/mikemichalowicz.com Mike\u2019s Twitter: https:\/\/twitter.com\/MikeMichalowicz Brian\u2019s Twitter: https:\/\/twitter.com\/BrianFinancial   About Brian and the Mission Driven Business Podcast  Brian Thompson, JD\/CFP, is a tax attorney and certified financial planner who specializes in providing comprehensive financial planning to LGBTQ+ entrepreneurs who run mission-driven businesses. The Mission Driven Business podcast was born out of his passion for helping social entrepreneurs create businesses with purpose and profit.   On the podcast, Brian talks with diverse entrepreneurs and the people who support them. Listeners hear stories of experiences, strength, and hope and get practical advice to help them build businesses that might just change the world, too. ","author_name":"Mission Driven Business","author_url":"https:\/\/btfinancial.com\/podcast","html":"