Profit First

Why I Love This Book

Profit First has had the second biggest impact on my life after Naval's Almanack—but for a completely different reason: it ensured I'd never worry about money again. This book presents a simple system for managing your company's cash flow that ensures you, the owner, get paid for your time and don't waste money on unnecessary expenses.

Key Takeaways

• Sales - Profit = Expenses: The revolutionary formula that turns traditional accounting (Sales - Expenses = Profit) on its head.
• Small Plates Principle: Using multiple bank accounts to manage money like we manage food portions - when we have less, we consume less.
• Quarterly Distributions: The importance of regular profit distributions to maintain motivation and reward good financial management.
• Parkinson's Law: How expenses rise to meet available resources, and how to use this principle to your advantage.

Favorite Quotes

"Profit is not an event. It's a habit."

"Revenue is vanity, profit is sanity, and cash is king."

Who Should Read This

Because of its focused approach, I consider this book a must-read for those already running a business that generates over $300K in revenue per year. That's if you want to be running a profitable business.

Final Thoughts

What makes Profit First so powerful is its simplicity and practicality. Instead of complex financial theories, it provides a straightforward system that any business owner can implement immediately. The book's approach to building profit into your business from day one, rather than hoping for it as a year-end result, is truly transformative.