Profit First With Author Mike Michalowicz (Full Presentation) | PrintHustlers Conf 2019
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- Опубликовано: 9 сен 2019
- How do you make more profit? In the screen printing business, it’s hard to make a profit. So what should you do? Put profit first. Author Mike Michalowicz joined us at PrintHustlers Conf 2019 to present his breakthrough system.
Read a written version of this presentation here: www.printavo.com/blog/profit-...
One year on Valentine’s Day, Mike had to go home to his family to tell them they were going to lose everything - their house, their cars, their possessions. He had been advised to declare personal bankruptcy. He didn’t - he went on an installment plan to pay his debts - but he had to go through a crushing period of depression and self-doubt.
That dark period (and some late night infomercial inspiration) helped him realize something powerful. “If you can continue to do exactly what you do, but change the system to make that behavior to your benefit, then you can have success in making a change.”
Instead of thinking of profit as an event that happens after expenses, profit has to come first.
Old way of thinking: Sales - Expenses = Profit
New way of thinking: Sales - Profit = Expenses
Mike’s take is simple: too many important business decisions are based on axioms.
“There is a foundational formula that perpetuates through society. It’s taught in every accounting book. It’s in our common vernacular. We’re all familiar with profit as ‘bottom-line’ and ‘year-end’ events. What’s left over is profit. That makes logical sense. But it doesn’t make behavioral sense. It’s human nature that when something comes last, it’s insignificant. When you say you put something last, you don’t care! It is wired into humanity that when something comes first, it’s important, when something comes last, it’s insignificant.”
Why are so many business owners living hand-to-mouth? Why are so many entrepreneurs struggling to make any profit at all?
"Profit isn't an event. It's a habit. It doesn't come at once, but we're trained to think that way."
They’ve been fooled by the process: profit was something that was supposed to come later. But the reality is that you can set up a series of bank accounts to structure profitability - so that it’s an automated part of your business.
Every time a sale comes into your business, immediately take a pre-determined percentage of that sale and allocate to it a cash account, hide it away, and the remainder will tell you what you can actually run your business off.
Here’s how Mike suggests setting up your bank accounts:
INCOME: your “serving tray.” This account feeds everything else.
PROFIT: an automated percentage of every sale is funneled into this account. This account is not easily accessible, and (ideally) out of sight.
OWNER COMP: your salary. Yes, you have to pay yourself a fair salary.
TAX: you have to pay the government. Automate it.
OPEX: your operating expenses.
Mike discusses Parkinson’s Law as a way to minimize your expenses. As you challenge yourself to cut costs and do more with less, you’ll introduce forced frugality. Your behavior around operating expenses will change. You’ll become innovative, frugal, and persistent.
The Small Business Administration conducted a nationwide study of entrepreneurs and small businesses. Of the 23 million small businesses in the United States (defined as a business of $25M in revenue or less), 83% are surviving check-to-check. They don’t have enough to pay rent, payroll, or owners unless they make sales today. Maybe one day, you’ll make a big sale...and that profit will magically appear later. Except...it doesn’t.
So how do you track cash if your bank accounts are “hidden”? Simple. You check on the 10th and 25th of every month. Why? Because then you’re not using the balance of your INCOME account as a vanity metric to determine the health of your business. Remember: your sales vary. If you can create a cash flow management statement that’s simple enough for you to see at a glance, you’ll have an instant “call to action.”
Every 90 days...reward yourself. Take a profit dividend. Embrace the same discipline that big companies have with their shareholders. Celebrate your success! You turned a real profit.
This is an abrupt shift. It’s a huge change. Mike is candid about this. Trying to implement profit first all at once is like trying to run a marathon with no training. “Don’t start running three times a week if you’ve never lifted a finger before!” Instead of raising the bar...what if we lowered the bar?
Start with two steps:
Set up your PROFIT account with the bank you already use.
Then, begin taking just 1% of each sale and put it into your PROFIT account.
“What comes last gets ignored. What comes first gets done. Always put your profit first.”
Try Printavo: www.printavo.com
Check out Printavo Merch: www.printavo.com/merch
Read a recap of PrintHustlers Conf 2019: www.printavo.com/blog/printhu...
#screenprinting #printlife #profit #printhustlers 
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You know - once in a while you just hope that you come across a video that impacts you just as this one has. Thank you very much. Will definitely go through your other material on this!
The book profit first is pretty helpful
Are your clients running away from you or your business already?
@@keepcreationprocess wtf are u talking about ?
@@shielduniversity419 I would run away and many clients do already...
This system change my business in 6 month 🙌 I’m already seeing the results 🫶🏻thank you and god blesse you 🙏🏼
i read your book 10 times before implementing it. been using it for one year for a tiny company that hes pretty much no expense expect starbucks coffee during meetings. Still managed tiny profit for a side project. Now i'm confident enough to start a million dollar business, and presented this idea to the business owners. They love it and want to implement it.
Am I the only one in tears at his 9 YO daughter's gesture??? 😥
Awesome content. Been running a business for 6 months and Have done exactly as expected sales and money back in business, over and over. Starting this week, I’m implementing this strategy and changing the way we run our accounts
I loved this presentation. Great one there man! - reading the book and I can't wait to apply everything that I had learned. Thank you!
It seems that I almost read more than half of the book (Profit First)except for the advance stuffs by just watching this video (#ThanksPrintavo). Aside from learning the fundamentals of the Profit First, I also learned a great way of how to engage your audience from start to finish 😀 👏
Yo' da men 👈 hats off to you Mike🎩
This guy is actually so funny. A comedy session and education in 1. Love it!
Thanks for the upload.
This is incredible. I've struggled with BED and addiction for years. I came here looking for business/financial advice, and I received so much more that I resonate with. I didn't expect to laugh so hard either.
Thank you so much for a visual! I have the book and need to see 👀 it physically. Now I have an understanding and Profit first make sense. Thank you!!!
I really enjoyed this Profit First presentation! It did an excellent job clearing up any questions about the book. I just recently finished reading "Profit First" and putting my foundational accounts in place. I look forward to reading and implementing "Clockwork" and "The Pumpkin Plan"!
Excellent presentation, answered so many questions!
Amazing presentation of the accounting system. The other videos on RUclips don't really go too in depth on why these steps are taken. Great video!
Wow, great video. Big fan of Mike Michalowicz, such a great speaker, also has a weekly podcast. So Covid-19 quarantine has given me the opportunity to watch and take note of all the 2019 Print Hustler Conference videos. Big thanks to Printavo for the great content, this will certainly help with our business.
A big thanks Justin.
Awesome video! ~ thanks for sharing. I’m currently reading “Profit First” …so this was soo worth hearing the author share 😂 love the humor!
Someone lowkey dreamed of doing stand up. Great presentation!
46:00 minutes in and I’m dying. Excellent presentation. Thank you Mike. Life-changing stuff
Almost kept scrolling to another video because of the length but I am so glad I didn’t. Great presentation and delivery. We just started our own LLC and my sister said I must read this book so here I am. Excellent concept. Makes total sense! I am a huge Dave Ramsey fan for years so I love that you mentioned him. Same concepts! Thanks for the laughs
What’s funny is that Dave Ramsey has gone on record shitting on this system, while admittedly knowing nothing about it.
Simply amazing!
Wowwww
Thank you
Profit comes FIRST
I LOVE IT
I have been going in this direction without knowing what it's called 🙂 thank you so much!!!!
yay! thank you so much for sharing this! I learned so much :)
Love this guy and great information. Looking forward to implementing this system.
I hope it serves you, Joshua.
What an inspirational video and so much fun to watch! I was hooked! I started implementing Profit First from your book and and so grateful to come across such valuable information!
This presentation is incredibly informative, delivered really well. Thank you for sharing. More from Mike please…
Mike is a Genius ♥️
Thank you for providing this lens on how to look at my new business finances. I've been wondering how to get paid. Great ideas.
Exit 8a
Super glad to share it. Mike is a dynamo.
Thank you for uploading this. Just made pages of notes over 2 sittings! I am currently listening to the Audiobook, but I am a Visual Learner, so seeing Mike bringing this to life through his story telling and visual diagrams really helps with taking it in and understanding the basic concepts!
Wow! Im listening to the audiobook and came here for the visual learning part. Very interesting.
So glad I got this guys book. About 30 pages in, found this and thought it would be a good back up.
I hope it serves you well.
Amazing video, thank you!
Excellent talk!
very impactful! Thanks!! I'm going to buy your book!
Great speaker!
Great video, cleared up a lot of questions I had after listening to the book on Audible. Big thanks!
Awesome, Brendan! Mike is really stellar, and Profit First is a brilliant system.
Thank you. Just Thank you.
I am happy you liked it.
thank you i so loved this and im excited to get out and start making changes!
The rock bottom story was very emotional and sad....but also it is so striking that that can be someones darkest moment - having to rent and have a tv and food and family. That is kinda a decent day for many of us :D
Amazing talk, thank you 🙏🏼
soooo good thank you!
This was so amazing…
What a fantastic speaker
I am honored. Thank you Brent.
Awesome freaking speech man! Thank you for sharing this with me! Awesome public speaker sir! Crushed it! 😎🤳🌏💪🏻🧠
i really enjoyed this presentation especially the allocation of funds and the percentages,,,the call to action and the 90 day rythm really spoke to me,,,thankyou so much for sharing this wisdom..
Thanks
Pay yourself first ❤
Great video, I'm a huge fan of the book (even though I'm still at Chapter 4).
Keep going! Great book, and his new one is fantastic, too.
Ibe been there twice
excellent, wow
Every bank would love you Mike......
Excelent video.
I'm just now starting my truck business and it's been bothering me trying to figure out how to pay myself and save my money right and also have enough money for my taxes.
First of all, i love your book. Seeing you do a presentation is a whole other experience.
Dude, you need to take your shot at being a comedian. Seriously, you're great on stage lol
I agree. I know standup pretty well and he's a natural. It would take a few years to hone an act but he could do it. I think it's cool that Mike get's to combine entertainment and education. He does it well.
Well thank you. Happy the training served you and you got some laughs. Here is to your health and WEALTH!
He tried to give the MC a handshake before the questions started. The MC totally missed it. So, after the Q&A, he went for a very obvious high-5, and it was a solid high-5.
This guy is hilarious. Throughly enjoyed this.
Sería bueno que tenga subtítulos en español. Gracias!
Loved it. Please Watch Entrepreneurs.
sorry but why isnt this guy on the comedy circuit he's an absolute natural
also very fanciable
ok i'm doing this!
@@virtualassistantforbusines7526 Tell me how Profit First is serving you.
Thanks for this -- Ugh I feel like this would be great if I actually knew how to implement it. Managing my finances as a freelancer is hard enough as is, switching everything up feels super intimidating...
As with anything, looking at implementing the entire system can be daunting. Break it down into small chunks, as Mike does in his books, and go step by step.
The key is to just get started. This builds momentum and you’ll be operating profit first before you know it.
Hope this helps.
Did you start the system? It's really powerful.
Pay yourself first for business
This was so good! Was there a document to download?
The 50% profit rule seems to stop accumulating if your profits are flat after the 50% you take out becomes equal to the 50% you put in. The mathematical phenomenon only works to an extent. What to do in this situation? Obvious answer is continually growing your business.
Or cutting expenses and being more profitable. Growing costs more money. Many businesses grew and imploded. Make sure you can afford to grow.
I went into my kitchen and removed all my dinner plates. It's only me here and I can eat on a dessert plate like GW! Thanks.
BOOM! I hope it is serving you. So many uses... sooooo many uses.
Any one here has some advice for implementing profit first to a new, fresh business. Should one start with the suggested TAP percentages from the table in the book?
13:00
Had me cracking up 😂😂😂
Is there a way to use the system with non profit organizations to make managing the business easier?
Hey Fiona,
Thank you for writing in. I am more than happy to help you with this.
Printavo is mainly for garment decorating shops to help manage their work flow. If you have invoices that need to be sent to your customers and need a way to track your jobs Printavo may be a good fit.
I would recommend schedule a demo with one of our onboarding reps who can show you how everything works and see if it would make sense for your business :) You can schedule a demo by clicking the link in my signature!
30:36 for the accounts
30:30 five accounts
50:00 sequence is important
52:45 banks
1:01:00 10/25 rule
1:03:00 Cashflow Management Statement
1:04:00 90 day - profit taking (used to celebrate)
Maybe I don't understand it correctly, but Profit First seems to work only on service related industries instead of buying and selling
Any business or even if you work a 9-5 and want better saving habits
@@laartwork Yep, I use it with my personal money too - take my Owner's Pay and sweep it into a number of sub accounts from there, as he also suggests in his book. I listen to it a couple of times a year, same with The Pumpkin Plan and Clockwork.
I’m implementing it as a manufacturer/wholesale/retailer. How I understand is, Income is all money in from all sources, materials & subs is the money I spend on subcontractors to produce the goods and the cost of raw materials. Minus this from income and that’s my real income. What I’m trying to work out is the gst (tax) I need to pay when I import my raw materials, so I include that in my materials cost or in my tax bucket? Anyone know?
Does the shareholder payout reward matter if you are just an LLC?
I got a question what bank do you recommended to put the % or you do it by yourself
5:22
Bless you child lol
This is the comment I was looking for.
Value for time spend
I talk about my kids like this guy. I call them Bums instead. Goons is a good one.
Ha! I love it. Creatures... they are food consuming creatures.
Wow Dave Ramsey answered a caller about profit first, and he poo poo on the whole thing wow. and you spoke at his event.
Where can I find that?
@@mochalatte8202 This call ruclips.net/video/97aj5pj3dzA/видео.html
RE: Q&A: Accountant = Mother-in-law... (And to riff off an old Dave Ramsey joke)
If you buy your accountant mother-in-law the "Profit First" book, and she never speaks to you again, was it worth it? :-D
Ha!
Is it the total revenue or the gross profit of the business because I don't understand
Idk how to tell him this…. Your kids are smokin weed brother if they goin through that many Cheerios
never heard of parkinsons law. but holy fuck you made it drag on.
Which account does paying house rent and utilities come from?
Opex
Owner's Pay for your personal rent and utilities. OpEx for business rent and utilities.
to set different bank accounts (Income, profit, owner's comp, tax, opex), would they all be business bank accounts or personal bank accounts or partly?
All business accounts.
Only when you draw from your profit and owner's comp accounts, then, you deposit money into your personal account. Just as you would treat a paycheck from an employer, the money stays in the business account(s) until payday.
Business and I’ve set them all up as savings accounts except for the operating expenses account. I have a very small business and figure they are going to receive money twice a month and pay out a few times a year. The operating expenses account will be doing most of the paying so incur most of the fees so that one is a monthly flat fee transaction account. The rest of the accounts can get a small 1% interest. Hey, I may as well have it rather than the bank!
Im gonna own a dodge VIPER 🐍
omg im dying laughing. hes so funny
right!? I wish he would do comedy lol
Well thank you for saying that!
So when you are losing money on every sale it’s actually bad news that sales are increasing. Ouch!
Ah precovid days
If only my boys used a bowl to begin with. They just grab the box and eat it dry.
this sounds good but has a huge potential to disrupt and further destroy quality of products created. He is sharing a the principals the corporations have actually been using. Most of us are in business because a do not like the way that traditional businesses have operated in the last 40 years. Use this but beware keep a close eye on quality!
It's there in the innovation forced from utilising smaller plates - you HAVE to adjust and CREATIVITY LOVES CONSTRAINTS!
It a great presentation until he talks about different bank accounts AND at different banks🤣🤦🏻♀️ people are already not disciplined enough to manage 1 measly bank account let alone multiple accounts and at different banks🤦🏻♀️ recipe for disaster! Take it from someone with experience who deals with small businesses
5 meals a day, will fatigue, least valuable goes last in sequence: how many more out-dated, demonstrably false analogies does he use? Next he's going to say we only use 10% of our brains. He's sewing doubt, man. Bad moves.
I hate how all the gurus start their spill with a sob story 😤
he has a good reason for it... if you watch the whole thing it makes sense
Sorry if I offended you by sharing my story. My hope and intention is to share ideas that may serve you.
I am surely not a guru. It is my true story, though, and I share it specifically because it is part of my life.
How sad that this guy uses profanity during his presentation. Diminishes his influence.
Or it's authentic to communicate with the audience, the flip side of that.
They are just words calm down
Genius! Exceptionally intelligent!🌤