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Today’s restaurant owner’s book report is on Profit First. This book is all about making you more money and flipping the script on how we look at accounting. Watch now!
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To learn more please either watch the video above, read the transcript or listen to the podcast below.
Read the Video Transcript by Clicking Here...
It’s been a long time, so I’m excited to bring you a book report this week titled Profit First by Mike Michalowicz or Motorbike Mike as he’s called in the book. This book is about making more money! You’re going to love it! You could get yourself a copy of the book or listen to it on Audible, which I like to do.
I am going to quickly tell you my thoughts on the book and then a couple of points that you can take away from it. The first 80% of the book is awesome! It’s engaging, it’s fast, it’s great, and he’s really cool! I loved it! The last 20%, however, gets a little slow. I kind of zoned out at the end because it gets a little deeper. If you don’t finish it, it’s no big deal because the first 70-80% of the book is so good.
Profit First is about making you more money and kind of flipping the script on how we look at accounting. The thing that I love the most about this book is that the author has the same philosophies that I do about creating multiple bank accounts. I think that if you struggle with profits and making money, you should create different bank accounts. The bank accounts that I generally recommend are your main operating bank account, a profit bank account, a tax bank account, and a repairs and maintenance bank account. The book recommends different bank accounts than I do above and it’s totally up to you what works best, but just this idea of having separate bank accounts will help you out in the long run.
Also, Mike Michalowicz shares the same ideas I do that standard accounting sucks! Standard accounting is known as GAAP (Generally Accepted Accounting Principles). It’s a philosophy that we use all over the world to standardize really complex accounting, make it easy to evaluate businesses, know where the money’s going, etc. It’s great for accounting and financial documents, but it’s terrible for running your business. This is the reason why I created a tool called BACON, because of how standard accounting sucks. While standard accounting is important, let your bookkeeper handle it. But, you need tools and methods to better understand what’s going on daily in your business and we share the same philosophy. The author has his own stuff that he uses, but just this idea that the accounting method you’re using isn’t helping you operate your business. The book goes into a lot more detail on this!
The most important takeaway is the mindset of paying yourself first. Again, I totally agree with Mike on this and feel that we as human beings have a scarcity mindset. We value what is scarce to us. For example, if we we’re running out of oil on our shelf and we don’t get a delivery till tomorrow, we’re going to be really careful about how much we use today to make sure that we don’t run out before tomorrow’s delivery. Money is the same way. If you start getting toward the end of the month and don’t feel you have enough money, you get really careful about spending. But at the beginning of the month, you’re a bit spender.
This idea of paying yourself first means that on a weekly, monthly, or a regular basis you’re going to pull a little bit of money out for profit or certain expenses. Then you’re looking at this bank account that looks a lot smaller, you’re going to start making hard decisions. You’re going to operate your business more efficiently and more effectively.
I can’t tell you enough how much I enjoyed this book, and I highly suggest you go read it. It’s called Profit First by Motorbike Michalowicz aka Motorbike Mike. Don’t forget to check out those Guardian Drain Locks they’re awesome, I think you’re gonna really like that product. I look forward to bringing you another great video next week!
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