Many small business owners and freelancers know the problem: they work twice as much as employees but can barely keep themselves and their businesses afloat.
The Profit-First system is designed to bring relief by putting the entrepreneur's profit first rather than last. The system is simple: distribute income to four bank accounts according to specific percentages: profit, owner's compensation, taxes, and operating expenses. And never spend more than is available in the operating expenses account.
Of course, business owners could derive the relevant data from their accounting reports – but few read them regularly. What they look at is, however, their bank account. And so, most base their financial decisions on their bank balance: they spend first – and end up forgetting their profits.
The Profit-First system allows entrepreneurs to maintain this "management by bank balance" principle by utilizing Parkinson's Law, according to which we use as much of a resource (in this case, money) as we have available. And if we only have a limited amount available for expenses, we become innovative and find solutions to get along with it.
The book is extremely practical; the author describes how to introduce the Profit-First system step by step. Besides, the book contains numerous case studies and amusing anecdotes from the author's life, which lighten up the dry numbers and instructions in a highly entertaining way.
Sometimes, the author rambles and repeats himself, and he probably could have condensed the book's content into half as many pages. However, this in no way detracts from the usefulness of the book.
I recommend it to all entrepreneurs who have so far based their decisions on their bank balance.
🎧 Suitable as an audiobook? Yes absolutely! It is narrated by the author himself, and all graphs and tables are available online.
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