I am tremendously surprised that I haven’t reported on this book before. I have been using the method for
over a year now, strike that, two years nearly, and Profit First has been the single most important financial book I’ve read as a serial small business owner.
When I was young, I learned the concept of tithing. While I wasn’t very fond of the idea of paying a portion of my income to the local church I attended as a young man, looking back I am exceptionally grateful that my parents and church leaders encouraged me to do so. Those small contributions, widow’s mites by sum, helped my community keep the local church doors open and afloat. More importantly, however, I learned a principle about money that could only be described in the useful idiom made famous by Benjamin Franklin, “A place for everything, everything in its place.”
Applying the principle of tithing to my own life, which I have for many years now, even after having left the church, I have grown a considerable foundation of wealth the likes of which would have never been possible without the idea of setting up to “the lord” the best you have. That allocation I have so dutifully sown with all my personal income has grown to a healthy spring of wealth.
But when it came to business, this principle seemed to have been missed by me. Everything that was going out of the business was everything that was going into the business. My business seemed to call for that as though it were the only way to stay afloat. And yet, each day I felt as though me and my business were headed for the hard rocks of financial ruin.
That’s just about the time I discovered Profit First on the front desk at the office late one night as I was pacing up and down the halls, stressed about how I was going to make all the bills work. I’d made more money than I had to date, that wasn’t the problem, and yet there was seemingly no more money for me at the end of the day. That’s when I saw those words, “Transform your business from a cash-eating monster to a money-making machine.” Those words shone like a light house in the thick fog of financial affairs I had made for myself. I picked up that book and read the whole thing in less than an hour.
The idea was so simple, the process so easy, and the implementation so quick that the effects were felt immediately (read: that night). In that single night, I corrected my financial future in a way I hadn’t thought possible at the time. A year later I had achieved a sense of financial security in my business that is hard to describe to my fellow associates who don’t implement these cash-flow ideas.
Now two years later, the fact that the Profit First Method worked on my business was no fluke. Later I applied these ideas to other businesses I took part in, and Mike’s ideas changed those businesses too (read: my friends and family’s lives). It took some time to help others understand that this palliative would fix what was ailing our businesses. Often it took them completely throwing in the towel before they’d let me steer. And to the surprise of friends and family, the idea that there is a “place for everything,” resulted in them achieving a level of wealth that they never had before.
In the end, all that it took to have greater security in our lives was a little faith towards an age old practice, setting up the best before the lord: a tithe.
What are your thoughts on cash-flow management? Comment below.