Put Profit First!

Most business owners and CEOs assume that profit comes after everything else. When all the bills are paid, profit is whatever is left over.

But Mike Michalowicz, author of “Profit First!” says putting profit first can transform your business from a cash-eating monster into a money-making machine.

You start with your profit goal.

“Putting profit first in your business doesn’t mean ditching everything you care about to only focus on the money,” says Rocky Lalvani, host of “The Profit Answer Man” podcast.

I find this idea compelling.

For 11 years, I worked at Seagram. When I joined the company, it was the largest distiller in the world. The desire to maintain that status led management to make many dysfunctional decisions, which put the company’s profitability on a downward trend.

Eventually, Seagram decided they didn’t need to sell the most liquor, they needed to sell goods at a higher price, which resulted in:

> The company eventually being sold for five times what it was worth when I joined the company.

The salespeople said that 𝑓𝑖𝑛𝑎𝑛𝑐𝑒 𝑤𝑎𝑠 𝑡𝑎𝑘𝑖𝑛𝑔 𝑡ℎ𝑒 𝑓𝑢𝑛 𝑜𝑢𝑡 𝑜𝑓 𝑡ℎ𝑒 𝑏𝑢𝑠𝑖𝑛𝑒𝑠𝑠. But they stopped saying that when the company earned record profits and paid 𝑏𝑖𝑔 𝑏𝑜𝑛𝑢𝑠𝑒𝑠.

Good finance can help a company make more money and the owner have more fun doing it.

Reach out to me if you want to talk about how to do both at the same time.

Putting profit first in your business doesn’t mean ditching everything you care about to only focus on the money.

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