💰 Profit First: The Cash Flow Flip That’ll Change How You Do Business (for the Better)

“Your business is not a charity… unless it is. But even then, it still needs money to operate.”

—Mike Michalowicz, Profit First (paraphrased… but you get the point 😉)

What if the whole system was backwards?

Imagine running your business like this:

• You make money (yay!).

• You pay your bills, rent, staff, taxes, subscriptions to tools you may or may not use…

• Whatever’s left over (if anything) is your profit.

Sound familiar?

Yeah, that’s the problem.

In his book "Profit First," Mike Michalowicz flips the traditional accounting formula on its head and delivers a brilliantly simple solution:

Traditional Accounting:Revenue – Expenses = Profit Profit First:Revenue – Profit = Expenses

Boom. Mic drop. 🎤

🔑 Key Concepts of Profit First

1. Pay Yourself First

Before you spend a dime on expenses, you take your profit out. You treat your business like it’s working for you, not the other way around. (Radical, huh?)

Set up separate bank accounts:

• Income

• Profit

• Owner’s Pay

• Taxes

• Operating Expenses

Money flows in → is intentionally allocated → and you immediately have clarity. 🧠💡

2. “Small Plates” Psychology

Think of your Operating Expense account like a smaller dinner plate. You’ll naturally spend less and cut the fat where needed. (Looking at you, unused software subscriptions and third-tier SaaS tools from 2022.)

3. Bank Balance Accounting (the honest way)

Most entrepreneurs check their bank balance, not their P&L. Profit First meets you where you are. You look at what’s in each account and operate from a place of constraint and strategy, not panic and overcommitment.

4. Rhythmic Allocations

Every 10th and 25th of the month (or whatever rhythm suits you), you distribute income across your accounts. You create a reliable money cadence—like a drumbeat of sanity.

💼 Why Business Owners LOVE Profit First (and why some resist it)

Love it because:

• It brings instant clarity to your cash flow.

• You stop running your business by gut and start running it by systems.

• You build actual profit into your model (hello, sustainable growth!).

Resist it because:

• “It’s hard to set up five bank accounts!” (no, not at all)

• “What if there’s not enough for expenses?” (then your business model needs adjusting)

• “But I want freedom!” (You’ll get freedom once your business is financially healthy.)

🧠💡 Connecting Napoleon Hill + Profit First

You might be wondering: What does Napoleon Hill have to do with all this?

Well, if you’ve read Think and Grow Rich, you’ll know Hill emphasizes:

• Definiteness of purpose

• Discipline of thought

• Burning desire mixed with a practical plan

Profit First is the practical plan. It’s structure with soul. It’s discipline with a dose of self-worth.

“Success requires no apologies. Failure permits no alibis.” – Napoleon Hill

Neither does poor cash management. 👀

📈 Performance Planning + Profit First

Let’s blend in some Think Unlimited™ Strategy here:Profit First works beautifully with performance-based planning. Here's how:

By tying financial planning to performance KPIs, you’re not just watching the numbers—you’re actively driving them.

🛠️ Want to Try Profit First? Start Here (read the book!):

• ✅ Set up the 5 bank accounts (start with 3 if needed).

• ✅ Determine your Target Allocation Percentages (TAPs).

• ✅ Schedule your allocation rhythm (bi-weekly works for most).

• ✅ Track & adjust quarterly—this is a living system.

• ✅ Celebrate your first real profit distribution! (Take that spa day, book that trip, buy that bike—you earned it.)

🎯 Final Thought: Innovation Thrives in Constraints

If your business is running paycheck to paycheck—or worse, living off the founder’s energy—it’s time for a better way.

The Profit First method may sound “restrictive,” but like most systems, structure creates freedom. Real freedom.

It's time to get your business off the hamster wheel and into a cash-flow rhythm that lets you think unlimited—and actually afford it.

📣 Call to Action

Curious how to implement Profit First into your business? Want to align your financial practices with your core values?Let’s co-create a smarter, more soulful business strategy together.

👉 Contact us at Think Unlimited to book a strategy session.