There is something flawed about how conventional Accounting is administered. Mainstream Accounting thought computes it like so: Expenses are deducted from over-all Sales. What this formula leaves out is the human element. Humans aren’t always logical and practical. For what it’s worth, more often than not, we are driven by mere wants, thus neglecting the need to determine the expenditures of worth and what are mere expenses. This is simply tragic when it comes to actual business.
Enter Entrepreneur Mike Michalowicz.
Mr. Michalowicz had devised a way by which things could be seen in a clearer lens. Instead of adhering to:
Sales – Profit = Expenses
He advised that modern-day accounting should be done with the formula:
Sales – Profit = Expenses
What this does, according to the Accountant and author, is that it allows businessmen and entrepreneurs to convert their businesses from expense-accumulating entities to profit-generating machines.
The book, “Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine,” addresses the aforementioned concern at length.
Through this book, a reader would be made privy to the following treasure trove of Accounting knowledge:
- The 4 principles that would ultimately simplify the management and the accounting of a business’s financial ventures; this would be done through the close examination of the owner’s bank account balances.
- Small-scale (but lucrative) businesses have the potential to further profitability compared to large businesses.
- Money-making endeavors that have the penchant of getting early and sustained profitability are more inclined or have higher chances of achieving long-term growth.
Lighthearted, Technical Content: The Review
The book reliably makes its case through the sampling of case studies adopting a quantitative approach. The discussions are practical and enlist step-by-step advice. The language of the book, with the employ of Mr. Michalowicz’s brand of humor, is lighthearted, making the content easily accessible.
A number of the readers are in agreement that “Profit First…” is a work that had changed the game. They highlighted the pay-yourself-first, a specific tactic within the text that would result in demarcating the line between the money that you spend for the business and the money that you actually keep.
Mike Michalowicz is an Accountant who has the game pinned. He has already sold a 2 multi-million dollar companies. He co-founded the Profit First Professionals, a comprehensive organization composed of accountants, bookkeepers, and business coaches who employ the “Profit First” method.