Why Your Business Is Broke (And How Profit First Can Fix It Instantly)

For years, business owners have chased sales, believing more revenue would solve their problems. Yet, the reality is stark: most businesses, regardless of size, struggle to keep the lights on. The root cause isn’t a lack of sales—it’s the outdated formula that puts profit last. Profit First by Mike Michalowicz exposes this flaw and offers a life-changing alternative.

Imagine waking up, checking your bank balance, and feeling a wave of anxiety. Sound familiar? Most entrepreneurs manage their finances by what’s in the account today, not by a plan. This is called 'bank balance accounting,' and it’s driven by human psychology. We spend what we see and hope there’s something left at the end. But hope is not a strategy.

Profit First flips the formula: Sales – Profit = Expenses. This simple change forces you to prioritize profit every time money enters your business. Instead of seeing profit as a reward for hard work, it becomes a non-negotiable part of your process.



Here’s how it works: Every deposit is immediately divided among several bank accounts—Profit, Owner’s Pay, Tax, and Operating Expenses. This creates natural constraints. Like using a smaller plate at dinner, you spend less because there’s less available.

Behavioral science backs this up. Studies show people eat less when served on small plates. The same logic applies to money: limit what you see, and you’ll use less. Over time, consistent, small allocations build habits that transform your business finances.

Real businesses have used this system to turn around years of struggle. One owner, after implementing Profit First, finally paid herself a steady salary and built a profit reserve for the first time in a decade.

Don’t wait for a windfall. Start now—even allocating just 1% to profit makes a difference. Over time, increase your allocations until you reach the healthy targets outlined in the book.

Profit First is more than a system—it’s a mindset. It empowers you to take control, build security, and enjoy the rewards of your hard work.

Ready to break the cycle? Make profit a habit, not a hope.