Mike Michalowicz: Profit First, Transform Your Business from a Cash-Eating Monster to a Money-Making Machine | E219

Mike Michalowicz: Profit First, Transform Your Business from a Cash-Eating Monster to a Money-Making Machine | E219

Mike Michalowicz: Profit First, Transform Your Business from a Cash-Eating Monster to a Money-Making Machine | E219

Mike Michalowicz had founded and sold two multi-million dollar companies by his 35th birthday and was confident that he had it made. After he became a small business angel investor, he lost his entire fortune due to a series of bad business decisions. Mike decided to start over, find a way to grow healthy and strong businesses, and eliminate entrepreneurial poverty. In this episode, Mike will break down his Profit First framework. He will also give the rundown on how to create and manage a profitable business.
Mike Michalowicz is the entrepreneur behind three multimillion-dollar companies and is an author of business books for entrepreneurs and small business owners like Profit First, Clockwork, The Pumpkin Plan, Fix This Next, and Get Different. Mike is a former small business columnist for The Wall Street Journal and regularly travels the globe as an entrepreneurial advocate. He became a business author with a clear mission: Eradicate entrepreneurial poverty.
In this episode, Hala and Mike will discuss:
– Why profits should come first
– The Profit First Formula
– How Parkinson’s Law applies to profiting
– Why you should split your money into small chunks
– Target Allocation Percentages (TAP)
– The way to handle business debt
– Why constrained spending brings natural innovation
– Why all revenue is not the same
– The most effective marketing strategy for small businesses
– And other topics…
Mike Michalowicz is the creator of Profit First, which is used by hundreds of thousands of companies across the globe to drive profit. Today, Mike leads two new multi-million-dollar ventures, as he tests his latest business research for his books. He is a former small business columnist for The Wall Street Journal and business makeover specialist on MSNBC. Mike is a popular main-stage keynote speaker on innovative entrepreneurial topics; and is the author of Get Different, Fix This Next, Clockwork, Profit First, Surge, The Pumpkin Plan, and The Toilet Paper Entrepreneur. Fabled author Simon Sinek deemed Mike Michalowicz “…the top contender for the patron saint of entrepreneurs.”
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[00:00:00] Hala Taha: What's going on, Young and Profiteers? Registration for my LinkedIn Secrets Masterclass is now live. You guys may know me as the podcast princess, but I'm also the LinkedIn queen. I'm one of the top influencers on the LinkedIn platform and I've totally hacked the algorithm I know at the back of my hand.

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[00:01:37] Again, that's YAP media.io/course, and use Code Masterclass for 25% off and I'll see you in class.

[00:01:57] Mike Michalowicz: I was doing a keynote two days ago. I asked her [00:02:00] to say, why did you start a business? And they all shared the same two reasons and I hear all the time. I started my business for financial freedom and I started for personal freedom. I said, who's experiencing that in this room? And there was 1500 people in the room.

[00:02:12] I would say six hands went up. We all this dream of financial freedom and personal freedom, and none of us have it. Most businesses are so financially strapped, that you have to work your ass off just to get through the day. As a resource expands its availability. The more time we have, for example, the more we consume.

[00:02:30] And it's true for money. And that's why so many businesses, as they see their sales increasing and revenue increasing over time, they get really excited. But almost uncannily expenses are increasing at the exact same rate. That's a natural human response, subconscious response, but we don't even realize we're doing it.

[00:02:44] But more cash means I have more to spend and we keep on spending. To reverse this trend, we simply need to take profit first. Profit is not an event, meaning eventuality. Profit is a habit.

[00:02:58] Hala Taha: What is up Young [00:03:00] and Profiteers, you are listening to YAP, Young and Profiting podcast, where we interview the brightest minds in the world and unpack their wisdom into actionable advice that you can use in your daily life. I'm your host, Hala Taha. Thanks for tuning in and get ready to listen, learn and profit.

[00:03:30] Mike, welcome to Young and Profiting Podcast.

[00:03:33] Mike Michalowicz: It's could be with you, Hala. 

[00:03:34] Hala Taha: Young and Profiteers. We have a living legend on the show today. We have Michael Michalowicz. He's a best-selling author, keynote speaker, and entrepreneur of several multi-million dollar companies. Who created the Profit First and Clockwork Business frameworks.

[00:03:47] I had Michael on the show way back in episode number 52, run it like Clockwork, where he shared his strategies for enabling your business to run by itself. And today's we're gonna focus completely on his classic framework, Profit First. And get the [00:04:00] rundown on how we can create and manage a profitable business.

[00:04:03] So Michael, I'd love to dive right into the topic of today. You've got a classic business book. It's called Profit First. It was released in 2014 and since then it has totally taken the business world by storm with hundreds of thousands of businesses using your method to drive profits. And fast forward nearly a decade after release.

[00:04:21] I still have many extremely successful entrepreneurs who come on my show and they reference your book. So we've mentioned your name several times on the podcast since you came on in episode 52, and there's so many businesses that handle their cash management using your system. In fact, my company YAP Media uses your system for accounting and it's actually considered a Bible at YAP Media in terms of our cash management.

[00:04:44] So let's start off with a basic question. Why do you believe profits come first in a business? 

[00:04:50] Mike Michalowicz: Because it is human nature. When something comes first, it's prioritized. And when something comes last, it's ignored or it's the Mañana syndrome. And so the analogy I use Hala, [00:05:00] is imagine you love your family. Which I know you do, and you imagine saying, I love my family so much.

[00:05:05] I decided to put them last. It's absurd. I love them so much. I put 'em first. I put my health first. Things are important. Come first. And what I noticed by studying the standard formula, the gap that join accepted principle for counting is that profit comes last and it's called the bottom line in the year end.

[00:05:22] And with execution, what this means, and maybe it's a subconscious response, but most entrepreneurs wait until the end of the year. It's April 15th now, and they're like, I don't have any profit maybe next year. So profit is only considered at the end of the year. When we fail to get it. We wait until next year.

[00:05:36] Why Teaching Profit First is that profit comes out of every transaction. So profit is not an event, meaning eventuality. Profit is a habit. 

[00:05:43] Hala Taha: I'm gonna dig deeper on all of these things. Let's first start about the traditional formula. So it's usually sell as much as you can, take away your expenses, and then the rest is your profit.

[00:05:53] But you say, this doesn't work because like you just said, it goes against human instincts because if we are saying, [00:06:00] that profit comes last. We're gonna think of it last. We're not gonna think of it first. So talk to us about the Parkinson's law and the primacy effect and how that actually impacts us from being able to use the traditional method and get our profits.

[00:06:13] Mike Michalowicz: Did you did your research. 

[00:06:15] Hala Taha: Of course I did, Michael 

[00:06:16] Mike Michalowicz: I love it. Those two things are such important behavioral components. Parkinson quick history lesson. Here's, a theorist from the 1950s studying human behavior and finds an interesting phenomena. As a resource expands its availability.

[00:06:28] The more time we have, for example, the more we consume. So if you and I are discussing an agreement, and I'll say, I'll get to you in one week. It'll likely take me a week. If you and I discuss the same agreement, the same people, the same parameters by say, I'll get to you in one day. I'll likely get to you in one day.

[00:06:42] So as we constrain a resource, we become more efficient. It's true for time. It's also true for like food. The more food put in front of us, the more we consume. And it's true for money. And that's why so many businesses, as they see their sales increasing and revenue increasing over time, they get really excited.

[00:06:56] But almost uncannily expenses are increasing at the exact [00:07:00] same rate. That's a natural human response, a subconscious response, but we don't even realize we're doing it. More cash means I have more to spend and we keep on spending. So most businesses get stuck in this loop of constantly trying to sell their way to profitability, and success and they never will get there cuz of Parkinson's law.

[00:07:17] Now the primacy effect means the next thing we see has a heightened importance. So as money comes in, those deposits come in, we look at it, say I got some money. Finally I can do, and whatever that do is the next important thing. We need to get new technology. We need to hire that employee, and we deplete the account immediately.

[00:07:34] So those two things in that scenario work against us by taking our profit first. When sales comes in, we take a predetermined percentage of that money as revenue and remove it away. It constrains the supply of cash. Now Parkinson's law becomes our ally. We're like, I don't have $10,000 deposits. I only have 6,000 available to operate my business.

[00:07:52] And we constrain and control our spending around that. And that 4,000 has been reserved for profitability. So now we're making Parkinson's law, [00:08:00] our beneficiary, our benefactor, I guess is the word. 

[00:08:02] Hala Taha: Something else that you teased out is that taking out profits is not an event. It should be habits. So can you talk to us about how we can actually make this more of a habit, rather than thinking about taking our profits out five years down the line?

[00:08:15] Mike Michalowicz: I think we look at profit in chunks by default. if I get one more client or I get the big sale, finally we're gonna get a chunk of profit. But the reality is profit is something that means, needs to be a habit or habitual. We build at it. It's saying, I'm gonna go transform my body by going to the gym one time and work out like an animal, and I'm gonna come out with a perfect body.

[00:08:35] We know that to have transformational effects on our body. We need to exercise regularly for a sustained and perpetual period. This is true for the fiscal body, if you will, of the business. It rarely really happens that you have that huge client and all that money comes in, and now you can reserve it and sit back and go ons easy street.

[00:08:53] What we need to do is every transaction, every time there's a deposit, a predetermined percentage goes toward profit. What happens is we start reverse [00:09:00] engineering profit. If I want my company to have a 20% bottom line profit, and I get a thousand dollars, I know 20 percent's $200 is hidden away, and now I'm reverse engineering that profitability.

[00:09:10] I have 800 left. That's why I have to work with, to run my business. So by taking out of every deposit. Now in practice, I wouldn't do every single transaction. We usually do it once or twice every two weeks. We allow the money to accumulate, so every couple weeks they accumulate money. Then we take our profit first and then go through these allocations.

[00:09:26] So it's much more rhythmic. But nonetheless, by taking the profit first. It becomes this habitual reverse engineering of profitability, and it assures profitability. You will always be profitable because you took your profit first. 

[00:09:39] Hala Taha: And this is really important guys, cuz this is actually how you build financial freedom as a business owner and entrepreneur.

[00:09:44] It's why you got into entrepreneurship in the first place. So you didn't get into entrepreneurship to build a job for yourself, where you're just on a hamster wheel. This actually allows you to get rewarded, pull out money from your business and build financial freedom. 

[00:09:58] Mike Michalowicz: Hala, I was doing a keynote two days [00:10:00] ago.

[00:10:00] I just got back and it was a large audience night. I asked the audience to say, why did you start a business? And they all shared the same two reasons, and I hear all the time. I started my business for financial freedom. I don't wanna worry about bills. And I started for personal freedom. I wanna do what I want when I want.

[00:10:15] I said, who's experiencing that in this room? And there was 1500 people in the room. I would say six hands went up. No one's experiencing it. We all have this dream of financial freedom and personal freedom, and none of us have it. It's the reverse. Most businesses are so financially strapped that you have to work your ass off just to get through the day.

[00:10:31] To reverse this trend, we simply need to take profit first. And by the way, this is nothing new. It's new to business, but the belief of the pay yourself first principle has been around forever. So I simply took that in the established concept in personal finance. Pay for your retirement, first reserve for your savings.

[00:10:47] First, live off the remainder. I simply applied it to business and it works. 

[00:10:51] Hala Taha: It does work. This is why hundreds of thousands of businesses use it. So at the end of the day, Profit First is really a cash management systems and one of the [00:11:00] most innovative parts is the fact that you say you actually need to split up your bank accounts into smaller chunks.

[00:11:05] And this is something that we've actually adopted it YAP Media, we love it. It's really helped improve the things that we do in terms of the transformation. Before we were doing this to after. Things are running a lot smoother and peace of mind as a business owner for myself as well, knowing we have like money for taxes, money for this, it's like I'm not constantly worrying about stuff.

[00:11:24] So for people who are unfamiliar. What is the advantage of actually taking all your money and splitting it up into different accounts? And then we can get into the types of accounts and everything. 

[00:11:34] Mike Michalowicz: Sure. So the technical definition of this process is called fund pre allocation. Meaning we're taking money and assigning it a responsibility before we spend the money.

[00:11:44] So the concept is that we set multiple accounts at your bank, and I gotta underscore this a million times. That is fundamentally the key. We do this at your bank because it's a behavioral intercept. So most entrepreneurs manage your business by logging through bank account. We have accounting statements, but we don't read [00:12:00] those.

[00:12:00] We have a simpler system for most of us. Log into the bank account and see what we have and spend accordingly by having multiple accounts at the bank. Determined or designated for different responsibilities. We know what that money is intended for and it will, before we spend it. We know how to spend it.

[00:12:15] And that's the key. 

[00:12:16] Hala Taha: And to your point, it causes an extra layer of friction. Where it's like you actually have to pull money out and put it in different things, where if you did it like on a spreadsheet and you just bucketed money in this way, it's so easy to just not be disciplined. Wouldn't you say?

[00:12:31] Mike Michalowicz: First, yeah. I don't even gonna look at the spreadsheet. I know what I'm doing, or I look at the spreadsheet and say let me just play with the numbers. And we unwind the whole system. Now, the reality is for most entrepreneurs, if they don't have profit first is they have a single primary checking account their bank.

[00:12:45] They have another one for payroll or something, but they have one or two bank accounts. What happens is all the funds go in there. They pay all the bills from it. And what I equate this to is imagine Thanksgiving dinner and you cook a Turkey or something and then instead of carving up the Turkey, you say to the guests, everyone fight for it.

[00:12:59] [00:13:00] Whoever wants it most wins everyone for themselves. And that's absurd. We instead carved the Turkey so everyone can get a piece of Turkey on their plate. The same things with our business. If you've won serving tray of cash. And you tell your business whatever needs it. Next we need to hire, we need computer technology.

[00:13:15] Fight for it. They will consume the whole Turkey and the rest of the business will starve to death. So what we're doing in the system is we're setting up plates for every guest at the business table, which we have all these different accounts for. We carved up, and that way everyone needs entire business is fed and healthy.

[00:13:31] Hala Taha: Awesome. So speaking of these plates there's really five plates or five accounts, that's main income, profits, owner salary, taxes, and operating expenses. So I think my listeners are really smart. All of these seem decently straightforward except for profits and owner salary. What's the exact difference between those two?

[00:13:50] Because especially if you're a solo entrepreneur, you might think profits is the same thing as your salary. 

[00:13:54] Mike Michalowicz: It's owner comp and it's not. So profit is a reward for taking the risk of starting a business. Here's the [00:14:00] scary statistics. Only 17% of the population will ever take the risk of starting an operating business, and only 20% will do it successfully for at least five years.

[00:14:09] So that means 20% times 17%, which is roughly 3%. Only 3% of the world population will ever run a successful business. 97% of the population is looking to work for a successful business. Our job as entrepreneurs is to be a creator of jobs, and the profit account is a reward, is a thank you for taking on this risk that only 3% of the people ever pull off.

[00:14:30] So just if you invest in private stock I have or public stock. I own some Ford stock. Ford sends out distribution check, profit distribution. I don't run to the Ford factory and say, I gotta earn this now. And I definitely don't return it to 'em and say, this is a Plowback. Let's go Ford. I say, I've taken risk.

[00:14:45] I want the value to increase, but it could decrease. This is a reward for doing what almost no one else will do. Our business. We hope the value will increase over time, but we've taken the risk. It may collapse. Profit is a thank you for supporting our global economy. Now, owner's salary or owner's [00:15:00] compensation is the pay for the work you do within your business.

[00:15:02] So most small business owners work within their business. And if Hala, if I had to replace you, I suspect you're the best salesperson for your organization. You're the best spokesperson, you're the most knowledgeable. You work your tail off for this business. What would I have to pay a person to replace you to do the same thing?

[00:15:17] Hundred thousand 200 a million dollars. It's a big freaking number. That's all I know. That's the number you deserve to make because your company found you. It has you. So your company must pay you. And if it doesn't pay you appropriately for what you're doing. It's a matter of time before we resent it.

[00:15:30] Most business owners say, screw my salary. I gotta pay everyone else. And years later I hate my company. I am starving here. So owner's salary is to pay you for the work you do. This is what your lifestyle should be adjusted to profit is the bonus for taking on risk that almost no one will do or take on.

[00:15:47] Hala Taha: So let's talk about how we actually get our TAP. So you call this target allocation percentages. So again, the five buckets are main income profits, owner's comp, taxes, operating expenses, [00:16:00] and we have to put percentages for each one of them. So why don't we start with profits? How do we determine the ideal percentage, that we should allocate towards profits?

[00:16:09] Mike Michalowicz: So what I did, and I'm not trying to be pitchy here, is in my book, but you can get online for free. I and my team analyzed a thousand businesses in all different industries, media industry, restaurants, manufacturing, professional services. We found that there is a percentage, that the fiscal elite the best performing companies in any industry will do.

[00:16:28] Now it's based upon different revenue ranges. So a smaller business, say you're a brand new startup, you make 250,000 or less in revenue. Which in the service industry is typically a single person operation. If that is your case, you'll probably take a diminished profit of maybe 10%. You'll take an expanded percentage of owner's salary, maybe 50%, you'll reserve 15 for tax.

[00:16:50] The tax account and business is your business can reserve your tax liabilities and responsibilities regardless to your formation. So you can have an LLC or sole proprietorship or an corp. And your business [00:17:00] can't pay your taxes and talk with a tax professional. How you distribute it is unique and different in each case, but the percentage will change.

[00:17:06] So once you hit a million dollars, you're not putting 50% toward profit or owner's compensation where you take a $500,000 salary. It may be reduced. Maybe now it's 20%. Once you get to a $10 million company, maybe the owner's compensation is 10%, went about a million dollars a year. So the percentage is adjusted.

[00:17:22] What I suggest people do is look at the resources, what we analyze, but don't necessarily start there. If you're an established business, a target is simply where we're headed. You have what we call caps or current allocation percentages. This is your starting point. If your business has never paid a profit before, and we're suggesting you can get to 20% in profit, Let's not start there.

[00:17:41] Let's start next month by going to 1% after a quarter. Let's go to two and 3%. Maybe the rollout takes us a couple years to get that 20%, but it allows your business time to digest and adjust to the taps that we're targeting. 

[00:17:54] Hala Taha: Let's hold that thought and take a quick break with our sponsors. You hear [00:18:00] that sound Young and Profiteers.

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[00:19:22] It took up just a couple days to turn out my website. We have a backend and a really nice looking front end. It was very easy to do, and we've already made $200,000, and I credit that to Shopify because Shopify enables me to focus on my business, to focus on making sure I have the best course possible.

[00:19:39] To focus on my marketing plan to focus on generating leads for my funnel. I just focus on the marketing and getting people to the Shopify site. And Shopify just halt the rest. I don't have to worry about tracking anything. I don't have to worry about fulfillment. I don't have to worry about conversion data and analytics.

[00:19:56] Shopify does that all for me, and by the way, they've got [00:20:00] plug and play websites that make it look really nice and really easy to set up too. So I've really loved the fact that it just took me a couple days to set up. And I was good to go and we haven't really looked back. Shopify lets me focus on what I'm good at and Shopify does what it's good at and damn Shopify is really good at what it does.

[00:20:17] Shopify and logging onto Shopify is always the highlight of my day. I'm really not lying when I say this, I mean it a hundred percent. I'm addicted to going onto the Shopify platform because it's just so much fun. It's really easy to use. I can go in there. They have got like a chat bot. I can answer any messages.

[00:20:33] If somebody chatted us, I can go see who signed up, how many orders I got. I can go see our conversion rates, how we're doing. I can see where the leads are coming from and what marketing channels need more help. I can also see a global view of where everybody's logged in from, like all the potential customers.

[00:20:49] Where they're logging in from, what part of the world, what stage of the buying journey they're in, and I can actually see when people are about to check out. It is such a dopamine rush to see four or five people checking out at [00:21:00] one time. And Shopify is so cool because if people don't end up closing out and not purchasing and they just abandon their cart. Shopify will actually notify you and suggest that you send an abandoned cart email.

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[00:22:14] Hala Taha: So I love that, and I wanna kind of dive deeper on that point. So you're saying take baby steps. Just start off with saying, all right, I'm gonna allocate 1% to profit, 2%. At the same time, we should be reducing our operating expenses by the same amount. So explain to us why we should do that. 

[00:22:30] Mike Michalowicz: That's the kind how the equation works is, when you take a percentage away for, or add it to something, you gotta take it away from something else. So in most cases, not all, but most cases, we will compress operating expenses. What our research has found, and we have over 700,000 companies have deployed profit first to give context.

[00:22:46] Most businesses run far too rich in operating expenses. They're spending upwards of 95% of inbound income was right back out the door to operating expenses, and there's a meager amount left for the owner. What we also found is [00:23:00] that the spending is, kind of aimless. It's just I heard we should be running Facebook ads cause other people told me.

[00:23:05] I'll do this and I'll do that. And there's no concentrated effort in a certain area. What's interesting is we start constraining the operating expenses, so we allocate more toward profits so forth, reduce that opex from 95% to 90 and then 80 and so forth. That the business owner, their behavioral response is interesting.

[00:23:21] It doesn't reduce the impact that the business is having. Instead, what it does is it requires 'em to focus more on what is having impact, and they make bets onto the sure things. So instead of just randomly testing stuff, they say, you know what? We've had success here. Let's do more of that. Or let's bring in an expert that can tell us actually how to do Facebook ads so we just don't blow money out the window, and they start becoming more focused.

[00:23:43] The greatest surprise for me, I never expected this is businesses that deploy profit first and reduce their operating expenses in the vast majority cases grow faster than their contemporaries who aren't doing profit first. Which I'm saying is most profitable companies grow faster [00:24:00] than unprofitable or check by check surviving companies.

[00:24:03] So it's interesting cause you think it takes money to make money. That's what we've been told. You need to spend as much as you can and that's not the truth. You need to be innovative as much as possible, and as you control and constrain opex, you become more innovative, more prudent in how you spend that money.

[00:24:17] Hala Taha: And I definitely wanna go pretty deep on that in a little bit. And it's so true. I think that everybody could look at their operating expenses right now and find one to 5% of like quick things that you can do to just streamline things, reduce your costs, and then allocate that towards profitability instead.

[00:24:34] It could be just cutting softwares that you don't use anymore. Looking at user seats on all your different platforms and realizing that you're paying for 10 seats that you don't use, and just little things like that. 

[00:24:44] Mike Michalowicz: So I started investing in companies again, and we just invested in a social media company.

[00:24:48] And the first thing we did is exactly what we said. We said, where's that? We said 10%. We said, where's the 10% we can cut? And we did it within a month, and the business has gone on unabated, and there was no damage, no nothing. We had subscription that we [00:25:00] thought we were using, but we realized we weren't.

[00:25:01] There's so much of this stuff that is being spent automatically that we were cut it. We able to cut it, and we all went to profit immediately. We brought cash stability to the business within a month just by cutting unexpected or unnecessary costs. 

[00:25:15] Hala Taha: So question for you. I've always known that when you're running a business, you really should have three months of safety net money in case something goes wrong, three months to cover all of your operating expenses.

[00:25:26] So you can pivot, figure let's say Covid happens again and your whole business goes under. So where do we keep that money? 

[00:25:32] Mike Michalowicz: So we set a, we call it the vault. And the vault is a bank account that we have with a secondary bank. So these bank accounts, we call 'em the foundational five that you're talking about.

[00:25:41] We keep it our primary bank. We then set up other bank accounts with other institutions with the intention of making it hard to access. So we don't have online banking typically. We don't have starter checks ever. We don't have an ATM card, and so in our case, we go to the extreme. We have six months of reserves for full operating expenses.

[00:25:58] And here's something that's interesting. With three [00:26:00] months or six months reserves that can stretch far more than three months because if covid happens, you don't have to sit here and just keep spending money. After month one, you're like, this is not gonna come back. I need to start controlling costs.

[00:26:10] So you start reducing your costs, but you still have that runway. So three months can last six or eight months. Six months can last a year to a year and a half. So we set a separate account. Now, what we did here at our office is we used an online bank in this case, but Kelsey, who's the president of our company, she has the username for the account.

[00:26:27] I have the password, but we don't know the other, doesn't know the party, the other's code. So it's like the nuclear keys to unlock a nuclear system, she has to enter the username, then she blocks it. I enter the password and we're in the system. Then we can access to this vault. But no one can make a rash decision.

[00:26:42] I can't go in there and say, I need the money real quickly for the business and take it. Nor she so separate account outta sight outta mind. Reserve that money for at least three months. 

[00:26:52] Hala Taha: I really love that advice. I didn't know that. So I'm gonna start implementing that at YAP. How about debt? What do we do if we have some debt that we need to pay [00:27:00] off?

[00:27:00] How do you suggest that we handle that? 

[00:27:01] Mike Michalowicz: The only way to handle debt is by being profitable. The first thing to understand. When I present on this, people come up and say, I have debt. I can't be profitable yet. I'm like, you have to be. So just real simple definition, debt is an expense you incurred in the past that you couldn't afford or chose not to afford, but used other people's money.

[00:27:16] Only way to pay this is that you make more money than you're spending right now, profit so that you can pay this back. It's the residual leftover that you can use to pay it back, so you have to be profitable. So step one is if you have debt, you have to implement profit first. You still allocate my profit.

[00:27:30] But the tweak is until this debt's away, when the profit distributions come out, we use a large portion of it, sometimes upwards of 95% of that distribution to eradicate debt. I'm not a fan of having debt. I'm a fan of self-funding. That's the position I put my companies in is that we have debt. We first get rid of it, and then we allow cash to accumulate in a vault account.

[00:27:51] So that we have runway and we can be a bank to ourselves if we have to be. One last tip about debt, and this is not my strategy, this was at least documented by Dave Ramsey. I [00:28:00] don't know if he's the creator of it, but he calls it the debt snowball. And it's illogical, but it's very behavioral. The logic is pay your debts with the highest interest rates cause that's the most expensive.

[00:28:09] The behavior though, is if we can get early wins, we're more likely to stick with something. So in his concept sort, debt by smallest amount due first to your larger debts. Get rid of the small debts first because it'll trigger that momentum, cuz you can tear up those bills and get the next one taken care of.

[00:28:24] So we found deploying that debt snowball effect. Sorting by amount due as opposed to interest rate, actually gets better momentum in debt eradication. 

[00:28:32] Hala Taha: That's super helpful. So let's talk about the profit account again. So I'm a business owner and I have to say I am pretty guilty of never taking money out of my profit.

[00:28:42] I never do. I always reinvested back in the business. I pay myself an owner's salary and I just let this pile of cash sit there. Actually, all my three months reserves is like in my profit account, right? So I need to pull that out and all of that. So what's your best practices in terms of taking out profits and the mentality. 

[00:28:59] You touched on [00:29:00] it a bit in terms of the fact that you need to reward yourself. You're the one who's taking on the risk and everything like that. But I guess like what would you say to me, I'm guilty of it. I'm not taking my profits out. So what would you say to me?

[00:29:10] Mike Michalowicz: It's usually a scarcity mindset that triggers that meaning, I'm afraid the business can't do this on its own yet, so I'm gonna put the money back in. It's like starting riding a bike with training wheels and every time you start getting momentum no. Put the training wheels back on and you never allow yourself to get the training wheels off.

[00:29:25] By reinvesting or plowing back, and those are words I can't stand. Cause what they are, they're soft terms for extra money for expenses. It's basically saying, here's an expense. You're not strong enough for healthy enough yet company not to get by without more expense cash. When you, as the owner say, take start taking profit distributions outta the business.

[00:29:43] The business now can't have the training wheels anymore. It has to sustain on its own. It has to work within its true budget. It doesn't get a little extra feed from the owner, the parent. So first thing is it harms a company by re plowing back money in over and over again. The second thing is, we wanna [00:30:00] empower the entrepreneur.

[00:30:01] So when you take that reward mechanism. When you get into the habit, you're like, wow, maybe you reward yourself by expanding your lifestyle in certain ways, or maybe you like to donate to charities or have an impact in some other capacity. But what it does, it starts empowering you to have a greater impact as an individual.

[00:30:16] So I, I really encourage you that profit has to go to you. It's your choice. How do you use it? But don't put it back in the company. 

[00:30:21] Hala Taha: Really great advice. So let's talk about the two buckets or accounts that we should never touch, which is profits and tax. And then also this vault that you just mentioned. I believe that's something we should never really touch. 

[00:30:34] Mike Michalowicz: I never really touched except for quarterly. So it's an account that sits aside. So what happens is as we allocate my into a profit, if we leave it at your active business account. It can come become very tempting day. Bills come in, you're like, I can't pay these bills. I have some profit money I'll take from there.

[00:30:49] The day you do this becomes a shell game, and now you don't have profit. It's an expense and you just pretended you had profit. So what we're gonna do is when profit gets allocated, we're actually gonna hide that away too. Taxes, the same symptom can [00:31:00] happen, not just take from the tax money. No, that's for the government.

[00:31:02] Let's hide that away. So we set that up a separate bank. Now we do touch it once a quarter, and there's a reason behind this. Everything I'm teaching in Profit first is a behavioral based. There's a behavioral based justification behind it. And the 90 day thing where there's an interesting phenomena around 90 days, 90 days is far enough out that.

[00:31:19] You have to make effort to get there, but it's close enough that you can anticipate it. It is pretty imminent, so it's a good rhythm. If you took profit once a year, it's so long out people don't even think about it. But since every 90 days is just around the corner. We keep on pushing toward it like, oh my gosh, can we be more profitable?

[00:31:35] So it builds our energy around it. And this isn't just a behavioral principle that I'm suggesting. All major public corporations do 90 day profit distributions, or the majority do. Ford every quarter sends out their profit distribution, and you'll see that with most public companies. They know the number one fiscal discipline is engagement in the shareholders.

[00:31:51] Get shareholders excited. If you reward them every 90 days, that's the highest level of engagement. Conversely, you'd think why just take out profit every week? I'll get really excited. [00:32:00] No. Then it becomes precedent and ex expectation. This is my new life standard. So 90 days is far enough out that we're anticipating it, but we can't get our hands on it right away, so hide that money away.

[00:32:10] The tax, same thing every 90 days is when tax quarterlys are due. That's when the money comes out. You can make your quarterly payments. These are your personal taxes. Your business can pay your personal taxes. Again, accounting professionals, sometimes they can't pay it directly, may have to reimburse you, but there's ways to do it.

[00:32:24] But that tax account is the same thing. We want it outta sight, outta mind. And when distribution day comes every 90 days we do on the calendar, that's when it comes out. And we reward ourselves with profit and we pay our tax bill through the business. 

[00:32:36] Hala Taha: I remember at YAP Media before we implemented Profit First, our first year in business, we were hit with such a big tax bill that we weren't expecting and it really hurt us.

[00:32:46] Like just cash flow wise.

[00:32:48] Mike Michalowicz: Gut punch. 

[00:32:48] Hala Taha: Now, taxes around the corner. I'm like, we're candled that. 

[00:32:51] Mike Michalowicz: Hala, this is the craziest thing. I'm really blessed. I get an email every like 15, 20 minutes now from readers of Profit First and my other books, but Profit First, predominantly [00:33:00] the number one busiest day of emails and I'll get one every minute or so is on tax day.

[00:33:06] So in the US, April 15th, it's unbelievable how many people say, I just paid my taxes. My businesses pay my taxes for me. I'm so excited. I thought people would be so excited about profitability and they are, but never having to worry about taxes again. And that bill that can just shock you. Having your business already counted for it seems to be like the biggest relief for people.

[00:33:25] Hala Taha: It really is there. That's one of the biggest things that I noticed with that. Okay, so we talked about how to change into this management system, taking baby steps. Why should we run our business based on what we can afford today rather than what we could potentially afford someday? 

[00:33:42] Mike Michalowicz: The biggest benefit of constrained spending working within your means is it brings about natural innovation.

[00:33:49] We talked about Parkinson's law. There's this hidden he revealed it, but this hidden secret of Parkinson's law as a resource increases. Says, the more supply of something, the more we consume. So if you put more food in front of [00:34:00] me, more cookies, I eat more cookies. What's interesting, he says, as you constrain the supply, we start changing our behavior around it.

[00:34:05] So if you only put one cookie in front of me, I'll break off a corner. I'll stretch it out a little bit. When we have less of something, we become very innovative. We think of new ways of utilizing it. So by constraining the spend in our business, we become more innovative. One of my favorite stories, and we have lots of 'em, but this was my favorite.

[00:34:21] There's a baseball team called the Savannah Bananas of Savannah, Georgia, and they are explosively successful. They are a all-star college team. In other words, they're in an industry that makes no money except for this one. They've become the Harlem Globe Trotters, and they are selling out their stadium of 5,000 people every day.

[00:34:37] They're more profitable on percentage basis than any team, including major league teams in the world. But what they've done, Was they implemented Profit first from the get-go and the founder, Jesse Cole and his wife Emily, reached out and said, when we ran Profit First, we didn't have enough money in our expenses to maintain the scoreboard with an electronic scoreboard.

[00:34:54] So instead of saying, we need to borrow money, or we gotta spend more than we have, they said, [00:35:00] the system tells us we can't afford it. No scoreboard. And what they did is they brought people from the stands like a boxing ring match. They walk by with a score between before each inning, and people loved it.

[00:35:11] They've engaged the audience in participating in the game, and that's one of their secrets for how successful they become. The moral the story is, constraint of cash brings around an explosion of innovation, new thoughts, and you'll break the industry rules. You are much, more likely to define the industry or redefine the industry.

[00:35:30] Hala Taha: We'll be right back after a quick break from our sponsors. 

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[00:36:37] Hala Taha: I love that. Another way to make sure that you're not depleting resources is to make sure that your product offerings are really focused, and that you're not all over the map in terms of how you're servicing your clients. So can you talk to us about that? 

[00:36:50] Mike Michalowicz: Hashtag truth. It does a truth bomb and a half.

[00:36:52] That's fact Hala, is that the more variability, the more we dilute our ability to be good at any one thing. So when we constrain cash, [00:37:00] again, when we reduce our operating expenses, become super efficient. The analogy I use here is a doctor. Imagine you had a heart scare and you get rushed to the hospital, and the doctor comes to you and says, I'm a heart surgeon.

[00:37:11] I'm also a neurologist. I started studying geriatric care. I'm thinking about doing pediatrics. I'm doing only different things. It's really enjoy it. I'm thinking about becoming a chiropractor next. What's your confidence in him versus, say you go into the hospital and the doctor approaches you and she says, I only do heart surgery.

[00:37:28] In fact, that's the only thing I practice. The exact case you have, I've done, 600 operations in the last two years, I have a 99.99% success rate. Who do you choose? The one who's doing everything or the one person that can save your life? Of course the one person that's proven they can save your life.

[00:37:44] Now this analogy translates to business. No, we're not necessarily saving lives, but you're transforming lives. You're having a major impact on business. Consumers want, most consumers want, the person who is most effective at curing their biggest need. And the only way to do that is to do the same [00:38:00] thing over and over again.

[00:38:01] That doctor, that heart surgeon has done the 600 heart surgeries learned 600 times over how to do it even better. The one heart surgeon, neurosurgeon, geriatric surgeon, has done about three heart surgeries and hasn't mastered it yet. The best customers want the best masters. 

[00:38:16] Hala Taha: Totally. That way you'll be able to charge top of market.

[00:38:20] Your team's gonna be like highly trained because you're gonna have SOPs for everything cuz you guys are doing the same thing over and over again. There's no different variables that everybody has to keep track of in terms of every account is different, or every way that you do it is different.

[00:38:34] That's how you really get efficiencies. 

[00:38:36] Mike Michalowicz: Yes, it's totally streamlined and customers will circumnavigate the world to find you. Like they, they'll go outta their way to find you. If you're the world's best heart surgeon, I don't care if you're halfway around the globe. I'll find a way to get there and I'll find a way to pay it.

[00:38:49] I won't say, Hey, does anyone know a heart surgeon in my town? I'm just looking for someone. Listen, there's some customers like that and there's some customers say, I just need someone to design a crappy website for me. I'll find someone local, but the elite customers [00:39:00] that 20% of the best customers say, I need the best website.

[00:39:02] In my case, for an author who does author websites and knows how to do it better than anyone else, I don't care where in the plant they are. I don't care so much how much to charge. If I can't afford it, there's a certain point I have tolerance, but I will pay an absolute premium because they get me. So you can dictate more people will seek you out.

[00:39:18] Streamline and efficiency comes about all by being narrow in what you deliver. 

[00:39:22] Hala Taha: And by the way, this means turning people away sometimes and telling people, no, I can't help you. I have so many people. I have a agency, I have a podcast network. I have a lot of people who come to me and they're like, you know what?

[00:39:32] Your social media service is really expensive. Can I just do three days, not five days? Can you just do this for me and not that? And I just say, no, I can't. This is my product offering. This is how I've established, what profits I make. This is how much I charge for it. And there's no other offer.

[00:39:47] Like this is the offer. Because if I just, I made the mistake early as an entrepreneur, just trying to be a people pleaser. I could do that. Sure, I could do that. And then it's, everything's just messy because you're trying to keep track of things and it's just not all the [00:40:00] same like you were saying.

[00:40:01] So you have a great quote in your book. All revenue is not the same. Talk to us about that. 

[00:40:05] Mike Michalowicz: All revenue's not the same. Congratulations on disappointing. It's one of the hardest disciplines for entrepreneurs is to decline, what we see as an opportunity when it's actually an albatross around our neck.

[00:40:14] Those small customers usually are the most needy customers. So when someone wants you to charge them less, they see you as value less. So you have to be very careful about that. What we need to do is differentiate between good customers and bad customers. And the nice thing is you can look at your existing customer suite right now and you can identify who surely are the best customers, not just on the financial basis alone, but also have a good rapport with us and so forth.

[00:40:39] There's a saying, birds of a feather flock together and they say that because it's, there's a truth to it. Those customers wanna learn more about them. Where do they congregate? Where do they hang out? You're much more likely to find more customers like them, but if you're willing to take on any customer, cuz everything's an opportunity. You're gonna start diluting yourself.

[00:40:54] You're gonna have a very, very type of customer need. You're gonna have some people that are very needy at the bottom, and it's going to [00:41:00] continually anchor your business down. So you have to have that discipline. I encourage people that haven't done this before. Start off with one customer. Start off with one decline go to of all your customers.

[00:41:08] You have to say, I'm sorry, we have to discontinue services for you. Or find a way to politely do it, but get rid of one notice. The drop in revenue will be unnoticeable, but the improvement in your emotional state will be radical. You'll go to sleep without thinking or worrying about this person.

[00:41:24] Transformation internally is radical, and that starts bringing the strength to do more of this. And as you free up from worry, as you get rid of the low hanging customers. Now you concentrate more on your better customers and they often start to flourish. You're more available for them. They may even demand more.

[00:41:39] So most cases, by eradicating the unfit customers. I'm not saying they're bad people, I'm just saying they're not a fit. There were those unfit customers. Often I see a revenue boost within a few months of that just because the emotional state for the owner and the team has changed. Now they're focusing forward with their best customers.

[00:41:54] Hala Taha: I definitely wanna talk about an example that I did at my company with this, because [00:42:00] we had an initiative in 2022. We called it Nice Clients 2022, and that's because we had an influx, when I first started YAP Media, the agency. We had lots of interest and lots of celebrities and big CEOs, billionaires, and these were very egotistical clients, and we ended up with some really big accounts.

[00:42:20] The profit was great. 20 30K monthly retainers. It was really hard to just walk away from that money. But I noticed that we were losing employees. The morale was down compared to when we first started. It was getting inefficient. These clients wanted more and more, and although they were paying us so much, they wanted us to do everything.

[00:42:39] And we just felt like we had to answer to every beck and call, and they were calling me on my cell phone, and it just was crazy. And so we're like, all right, we're gonna have to say goodbye to these big. Monthly, retainers and do what's best for our company and company culture. And so we actually let go of two huge accounts and it hurt in the short term, but long term, I was [00:43:00] freed up to come up with new, innovative, scalable ideas.

[00:43:03] I started my podcast network, I started my masterclass. These are all things that have already made up for that revenue plus some and are more scalable than a talent heavy agency. So it just goes to show that sometimes you gotta eat it in the short term, but it's good in the long term. 

[00:43:16] Mike Michalowicz: I have a very vivid memory of myself of getting rid of a customer ,when my business was at a point where we needed money and it was a substantial revenue opportunity, but this person was so rude to their own employee.

[00:43:29] We were doing a conference call, so rude. I was shocked in that moment. I said, I'm not doing business with this person. By the end of the call, I said, I'm sorry. We just can't serve you. I hung the phone and I felt this relief. I felt panicked, still I need this money. I was like, I finally stood up for not allowing that kind of behavior and I would never will allow it again, and it became such an empowering feeling.

[00:43:48] I think when you have that empowering feeling, you also become more confident, which makes you a more effective salesperson. So it starts that upward spiral for sure. 

[00:43:54] Hala Taha: I love it. This is such an impactful method. I recommend that everybody go get Profit First. Like I said, it's [00:44:00] like a Bible at YAP Media. A couple more questions before we close.

[00:44:04] I know that you mentioned that, or we mentioned that this is the path for financial freedom for owners and entrepreneurs, so how can we take this system and then once we get our profits, how do you suggest that we manage those finances? And break those apart. I knew that you mentioned that there's like personal accounts, that we should have as business owners as well.

[00:44:24] Mike Michalowicz: There's personal accounts. Yes. I have a chapter in Profit First called Profit First Life, and there is a parallel between our finances at home and finances at work, or I shouldn't say link, as opposed to parallel. Meaning if I am doing poorly at home but the business is doing well, I will leach off my business and cripple it.

[00:44:41] Or if I'm doing well financially at home, my business is struggling, I'll start funding it. So both will go down. So we need to have. This financial acuity and comfort, not just a business, but also at home. We do the same thing. My wife and I implemented this when we implemented Profit First for our business.

[00:44:55] We implemented our house right away and it brought such clarity in our communication. We used to be saying, [00:45:00] Hey, can we go on this vacation? And I like, I don't know. And there'd be disagreements and stuff. Now we have an account that says vacation. And so my wife will say, Hey, I wanna go on vacation.

[00:45:08] She actually just called. A week ago, I said, I wanna go to Cabo. I'm like, okay. I'm like, I said, can we go? She's the account has the funds. I'm like, we're on. So we set multiple accounts for multiple purposes. It could be education for yourself or for your children or grandchildren. It could be vacation or it could be emergency circumstances, it could be repairs or maintenance of your property or homes.

[00:45:27] So we have, and I went a little bit in excess, 17 accounts now, but what happens is money flows in my income and then gets pre-allocated based upon percentage at home to all these different accounts. And it's brought with me and my partner, my wife, absolute financial understanding and acuity. We both understand where the, where our financials are at home without having to have discussions or sometimes arguments over it no more.

[00:45:51] We know exactly where we stand. So it's the same deployment in our personal finances. 

[00:45:55] Hala Taha: And just a hot tip for everybody. I use Brex and it's free to create as many accounts as [00:46:00] we want. Are there other bank accounts, where it's free to just have as many accounts as you want? 

[00:46:03] Mike Michalowicz: My favorite bank, hands down, it's called Relay.

[00:46:06] And what's so interesting about Relay is they've become certified in Profit First. So you can go to Relay Bank or it's relay fi.com. I think financial institution. And you go in there and it'll say, do you wanna set pro first account? And you click yes and it goes, it rolls 'em out. It's a no charge, no fee bank.

[00:46:24] And it'll even do now automatic allocations. So you can say 10% to profit, 15% here, and you say Boop, and it starts doing the allocations for you. So they're a great bank. 

[00:46:33] Hala Taha: Awesome. They're not a sponsor of YAP, but maybe we'll reach out to them. 

[00:46:37] Mike Michalowicz: We got have a little talk with them. 

[00:46:40] Hala Taha: All right, so Mike, you have a new newish book came out in 2021.

[00:46:44] It's called Get Different. It's a marketing book. What can we expect in that book? Because if it's anything like your past books, I'm sure it's brilliant. 

[00:46:50] Mike Michalowicz: Thank you. I'm extremely proud of this book and what I did is I deconstructed what is the most effective marketing for small business businesses under 25 million in revenue.

[00:46:58] But my sweet spot is [00:47:00] companies under a million dollars in revenue. Really small enterprises, we don't have a budget for marketing. How do we do it? And I boil it down to three key elements, makes an acronym DAD, d-a-d. And subsequently, I heard every dad joke on the planet now, but the first D stands for differentiate.

[00:47:15] The only way to get noticed, and this is all again, behavioral mechanisms is if something is unexpected, if you ever walk down a street and you do that double take what was that? Cuz your mind registers something unexpected. So do something unexpected. Now I'm not saying outrageous, so I'm not saying weird.

[00:47:28] There's something that's inconsistent with the common noise. The second thing is it also must be A attractive meaning when someone takes a double look, you have 'em for about a millisecond. Now you have to wind them over and saying, that's for me. So what does your audience need to hear first? And usually it's that you acknowledge their pain.

[00:47:45] Are you feeling this? Or you talk about the benefits, do you want that you don't talk about features? Then the last part is direct, and direct is now they have this, what action they need to take, and the key is what? Micro action. What's [00:48:00] the first small step that they will safely take? So if I draw into my car lot, cause I got that flipping balloon thing and you come in, say, I want a new car.

[00:48:07] And I say, gimme a hundred thousand dollars. We'll find it. You're done. Are you kidding me? It's so outrageous. But if I say, Hey, would you gimme your cell number? I can send you pictures of our inventory. That's the small first ask that gets the momentum going. So get different talks about how to use the dad model, differentiate, attract direct for small businesses to start winning over business opportunity after business opportunity.

[00:48:28] Hala Taha: I love that, and we have so many small business owners who listen to the show. So I'd love to have you come back on, give us your marketing advice, and then I can do some sort of like best of Michael Michalowicz episode. 

[00:48:38] Mike Michalowicz: Oh my God, I would love to. 

[00:48:40] Hala Taha: I was definitely gonna do that. All right, so the last two questions that we ask on the show is, what is one actionable thing our Young and Profiteers can do today to become more profitable tomorrow?

[00:48:51] Mike Michalowicz: Real simple. Only set one account. So we talked about the foundational five. You can do this in your personal finances or your business, you choose, but call your bank and set one additional account and [00:49:00] call it profit. Then any money that comes into your personal account or any money comes into your business account, take 1% of it and move it into this profit account.

[00:49:07] The reason we do 1%, it's so small, is it's not gonna negatively impact your lifestyle or your business lifestyle. It's gonna have a very positive impact in your mindset cause you'll start seeing cash accumulating. When you see that this can work at such a small level. It's just a matter of time before you get momentum and expand it out.

[00:49:22] Hala Taha: That's great. And what is your secret to profiting in life? And this could be relationships, financial, however you wanna think of profiting. 

[00:49:31] Mike Michalowicz: It's funny, one of the secrets I guess is just something I discovered in the last year or so, and I've really been practicing this. I meditate every morning and I have a ritualized morning.

[00:49:39] And one thing I asked myself and I have stopped asking, will I be successful in life? I've been asking will I matter? In this life. Cause when I take my final breath on this planet. I don't know if people will say, he was successful as much as Mike mattered. I think that's the more important thing, that's what people remember.

[00:49:55] So I ask myself every morning, am I gonna do something today that matters? And [00:50:00] that has changed my trajectory, and it actually brought more energy to being of support to my fellow humankind. 

[00:50:06] Hala Taha: I love that. That's so beautiful. Michael, it was such a pleasure to have you on your on the show. You are so smart.

[00:50:12] And this was one of the most actionable, no fluff podcasts that I've had in a while. So I really enjoyed it. That's my goal at Young and Profiting to be actionable. I think people are gonna be taking a book worth of notes. So thank you so much for your time. 

[00:50:24] Mike Michalowicz: This has been a joy Hala, as always. Thank you.

[00:50:27] Hala Taha: Thank you.

[00:50:33] Profiting advice from the profit of profits, Young and Profiteer. Like I mentioned in the interview, we align to the Profit First cash management framework at YAP Media, and we're getting even a little tighter in terms of following the framework because we know it just works so well, and it really gives us peace of mind.

[00:50:53] With five bank accounts, it makes managing our finances much easier and we can make quicker decisions. We're still [00:51:00] refining and improving, and this year I'm gonna be taking profit distributions for the first time. This is a major goal of mine for 2023, and it's important to reward myself for taking that risk and starting this business and quitting my job, and putting so many hours into this business.

[00:51:17] I deserve to take that profit out because really what I'm doing is I'm not taking the training wheels off. And it really made me realize, that if I wanna create a sustainable business, I have to take those profits out and make the team tighter, stronger, reduce all the fluff expenses, and whatnot to make sure that we've got a really tight business.

[00:51:36] So I'm gonna do it. It's time for the payout, YAP fam. And I hope if you're out there listening, if you're also not taking profit from your business and just continually reinvesting. Let's take the training wheels off. Let's reward ourselves. And if you are on a worksheet to get started on the Profit First Framework, my team found a really great resource and they downloaded the pdf.

[00:51:57] We put it in the show notes. It's a really great free resource [00:52:00] from Michael Michalowicz on how to get started with Profit First. Again, you can find that in the show notes. I think my favorite moment from this episode was our discussion around the fact, that not all revenue is created the same. This is so true.

[00:52:15] Sometimes money that's available actually goes against our values or integrity. Sometimes taking an opportunity, that might bring in cash in the short term pulls you away from your long-term goals. Sometimes there's an opportunity cost of saying yes because your time is so precious, and focusing on the wrong activities could actually prevent you from making progress on your highest leverage opportunities. That will help you make life-changing wins.

[00:52:43] Not all money is good money or money that you want right now, so remember that. Michael Michalowicz has a lot of classic business books aside from Profit First, like The Pumpkin Plan and Clockwork. And I highly advise that you buy his books if you're an entrepreneur, as they're always [00:53:00] full of practical and actionable nuggets to leverage for your business.

[00:53:03] And by the way, I read these books when I was in corporate too, and I really enjoyed them. Thanks so much for listening to Young and Profiting podcast. If you listen, learned and profited, be sure to share this episode with your friends and family and share this podcast by word of mouth. And do take the time to drop us a five star review on Apple or your favorite podcast platform.

[00:53:22] That's the number one way to thank me and everybody who works at this show. We'd really appreciate it and we love to read your reviews. If you like watching your podcast videos, every single episode that we do at YAP is actually uploaded to YouTube, and we also put up micro content clips, shorts, you name it.

[00:53:39] If you like watching content on YouTube, if you want more digestible content from the podcast, check out our YouTube channel. You can also find me on Instagram @yapwithhala or LinkedIn by searching in my name. It's Hala Taha. Big shout out to our amazing YAP team. You guys work so hard and I appreciate you so much.

[00:53:56] This is your host, Hala Taha, signing off.[00:54:00] 

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