summary ofProfit FirstBook by Mike Michalowicz

first KEY POINT

Your business is a monster, consuming your cash

Most people start a business with grand dreams of becoming millionaires and a desire to be their own boss, and not answer to anyone else. They want to grow that business over a relatively short amount of time. That’s the dream, but the reality is often far different.Most entrepreneurs put growth before profits; this means they’re constantly chasing their tails, becoming stressed, and never really seeing any gain. We believe that if we work a little harder, we’ll achieve more growth, more money, but it never works that way.Half of all businesses fall into failure within the first five years of being established — that’s a considerable amount, enough to put you off starting your own business! The businesses that do survive are often struggling to stay afloat, fighting debt constantly. If this is your business, it has turned into a monster; it is eating your cash, causing you to become stressed, sucking the life right out of you.

Mike Michalowicz tells a rather remarkable story about his financial wake–up call. He successfully sold a computer forensic science investigation business and earned big money as a result. He spent it all within the first two years through lousy spending decisions and poor investments. He then received his tax bill and panicked because he didn’t have enough left to pay it. He finally told his family, ashamed of himself and the position he was in. His 9–year–old daughter came into the room with her piggy bank and offered her savings. At that moment, Mike Michalowicz learned the actual value of money, and “Profit First” was born!Did you know? Mike Michalowicz now has a net worth of over $1 million.