Profit comes first, not last from "summary" of Profit First by Mike Michalowicz
The core principle of Profit First is that profit should be the first priority in a business, not something that is considered after all the other expenses have been paid. Traditional accounting tells us that we should focus on sales first, then subtract expenses to find our profit. However, this approach often leads to businesses struggling to make ends meet, constantly feeling like they are just one step away from financial disaster. By flipping this equation and prioritizing profit, we are forced to change our mindset and approach to managing our finances. Instead of trying to find ways to cover costs and hoping that there will be some profit left over at the end, we are now focused on ensuring that our business is profitable from the start. This shift in perspective forces us to become more disciplined and intentional about how we allocate our resources. When profit is the first consideration, it changes the way we make decisions about expenses. Instead of automatically assuming that every expense is necessary, we are now more critical and discerning about where our money is going. We begin to question whether certain expenses are truly adding value to the business or if they are just draining our resources. Prioritizing profit also encourages us to find ways to increase revenue and efficiency in order to boost our bottom line. When profit is the primary goal, we are more motivated to find creative solutions to generate more income and reduce unnecessary costs. This proactive approach to financial management puts us in a better position to weather any economic challenges that come our way.- The concept of profit coming first is about fundamentally changing our mindset and behavior when it comes to managing our finances. It forces us to be more strategic, intentional, and disciplined in how we allocate our resources. By making profit a priority, we set ourselves up for long-term success and sustainability in our business.
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