What It Truly Means To Be Profitable w/ Mike Michalowicz
Do you get stressed out at tax time? What about budgeting for retirement? Does bookkeeping give you migraines? All these are essential parts of being a business owner but I doubt they’re anyone’s favorite parts. Today, I have Mike Michalowicz here who understands these topics and also understands how to help business owners like you and me take control of these daunting parts of your business.
Mike is the author of one of my favorite books, Profit First. He is a popular speaker on topics surrounding entrepreneurial innovation. Years ago, Mike lost nearly everything, but today he’s running his third million dollar business. Mike’s mission is to share his life’s lessons and his “Profit First Formula” to help businesses ensure profitability starting with their very next deposit.
In this interview, Mike and I talk about what it truly means to be profitable. This goes beyond just measuring your bottom line but being able to reward yourself as the business owner. Mike lays down some truth about understanding just what sustainable profitability is and why many business owners fail to see it.
If you’re like me, you might want to keep a tissue handy for this interview as Mike gets real and emotional about his own struggles with profitability. It’s a powerful story that many entrepreneurs will resonate with and a great reminder that no one is alone in this struggle.
You’re going to get some great actionable tips for how to get started or go further in creating a new kind of legacy for you, your family, and your business. As Mike tells us, it all starts with profit.
What can you do right away to start putting your profits first? Let me know in the comments on the episode page!
In this episode:
- What profitability really means for entrepreneurs and how it should result in rewards for you
- The important differences between revenue and profitability and why understanding the difference is key to long-term success
- Sound and actionable advice for entrepreneurs facing financial struggles
- How to escape from the limitations of traditional accounting
- The different types of accounts your business should have to ensure that you are prioritizing profitability
Quotes:
“When it comes to our definition, the entrepreneurial definition of profit, it is cold hard cash available for the withdrawal and for distribution to the shareholder - the owners - of the business.” [9:23]
“We need to change the formula for putting profit last to putting profit first. And we got to put our profit first so that it becomes habitual.” [15:58]
“Every time a sale occurs, when money flows into your business, you’re going to take a predetermined percentage of that money, allocate it towards profit in a literal account, store that money away and the remaining cash is going to be available to run your business. It’s the pay yourself first principle simply applied to business.” [32:48]
“I think as owners we’re naturally givers. We want to give employment. We want to give our clients service. But the greatest giving is where we have financial freedom and the ability to give in the moment without having to worry about the financial stress.” [43:41]
Links:
Follow Mike on Twitter | Facebook
Profit First by Mike Michalowicz
Send me your questions for the upcoming live Q & A here!
Additional Links:
Check out the full show notes page
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