Scaling Up Business with Bill Gallagher 143: Best Of: Profit First with Mike Michalowicz
Did you know that 83% of small businesses around the world are not profitable? Business owners are living month-to-month and are desperately struggling. Today’s episode dives into how to never live paycheck-to-paycheck again.
Mike Michalowicz is the author of several books including The Toilet Paper Entrepreneur, Surge, and Profit First. He is also the Owner of Profit First Professionals, his third million-dollar venture.
Why did Mike decide to write Profit First? Mike had grown his companies to multi-million dollar businesses but was not profitable at all. He had refinanced his house multiple times and was not making ends meet.
He thought if he could run the business long enough, they’d eventually hit their ‘big break’ and become profitable. After selling his businesses, he decided to become an angel investor with this mindset and — guess what — the 10 businesses he invested in all tanked. Within two years, he lost every penny that he had ever made.
After he told his family that he had failed them, he went through two years of ‘functional’ depression. It was not a proud moment in his life. Through this journey, he was able to ask himself some hard questions and those hard questions lend to a lightbulb moment. How can I make my businesses profitable, always?
Keep in mind, it’s also a lifestyle problem for many entrepreneurs as well. As they’re trying to live a good life and create a profitable company, in the back of their mind they’re worried about whether or not they can afford their car or their home tomorrow. The amount of stress this puts on someone makes it very hard to see the bigger picture.
Mike’s accountant was trying to help him by showing him the real numbers, by showing him the metrics, and Mike would brush him off and not listen to his advice. If Mike saw he had money in the bank, then he had money in the bank! But it isn’t always so simple.
Mike knew that he had to change somehow, but changing your behavior right off the bat is a very difficult thing to do. So, what he did was he decided to put a percentage of his money into a ‘profit’ bank account and run his business on the remaining cash. By making this simple shift, he was able to see things from a bigger perspective and he was forced to reverse engineer his business so it would survive on the remaining cash no matter what.
Interview Links:
mikemichalowicz.com: For access to Mike’s Wallstreet journal articles, book excerpts, and entrepreneurial tips.
Resources:
Scaling Up for Business Growth Workshop: Take the first step to mastering the Rockefeller Habits by attending one of our workshops.
Scaling Up Summits (Select Bill Gallagher as your coach during registration for a discount.)