Home » Breaking News » Profit First With Author Mike Michalowicz (Full Presentation) | PrintHustlers Conf 2019

Profit First With Author Mike Michalowicz (Full Presentation) | PrintHustlers Conf 2019

How do you make more profit? In the screen printing business, it’s hard to make a profit. So what should you do? Put profit first. Author Mike Michalowicz joined us at PrintHustlers Conf 2019 to present his breakthrough system. Read a written version of this presentation here: https://www.printavo.com/blog/profit-… One year on Valentine’s Day, Mike had to go home to his family to tell them they were going to lose everything – their house, their cars, their possessions. He had been advised to declare personal bankruptcy. He didn’t – he went on an installment plan to pay his debts – but he had to go through a crushing period of depression and self-doubt. That dark period (and some late night infomercial inspiration) helped him realize something powerful. “If you can continue to do exactly what you do, but change the system to make that behavior to your benefit, then you can have success in making a change.” Instead of thinking of profit as an event that happens after expenses, profit has to come first. Old way of thinking: Sales – Expenses = Profit New way of thinking: Sales – Profit = Expenses Mike’s take is simple: too many important business decisions are based on axioms. “There is a foundational formula that perpetuates through society. It’s taught in every accounting book. It’s in our common vernacular. We’re all familiar with profit as ‘bottom-line’ and ‘year-end’ events. What’s left over is profit. That makes logical sense. But it doesn’t make behavioral sense. It’s human nature that when something comes last, it’s insignificant. When you say you put something last, you don’t care! It is wired into humanity that when something comes first, it’s important, when something comes last, it’s insignificant.” Why are so many business owners living hand-to-mouth? Why are so many entrepreneurs struggling to make any profit at all? “Profit isn’t an event. It’s a habit. It doesn’t come at once, but we’re trained to think that way.” They’ve been fooled by the process: profit was something that was supposed to come later. But the reality is that you can set up a series of bank accounts to structure profitability – so that it’s an automated part of your business. Every time a sale comes into your business, immediately take a pre-determined percentage of that sale and allocate to it a cash account, hide it away, and the remainder will tell you what you can actually run your business off. Here’s how Mike suggests setting up your bank accounts: INCOME: your “serving tray.” This account feeds everything else. PROFIT: an automated percentage of every sale is funneled into this account. This account is not easily accessible, and (ideally) out of sight. OWNER COMP: your salary. Yes, you have to pay yourself a fair salary. TAX: you have to pay the government. Automate it. OPEX: your operating expenses. Mike discusses Parkinson’s Law as a way to minimize your expenses. As you challenge yourself to cut costs and do more with less, you’ll introduce forced frugality. Your behavior around operating expenses will change. You’ll become innovative, frugal, and persistent. The Small Business Administration conducted a nationwide study of entrepreneurs and small businesses. Of the 23 million small businesses in the United States (defined as a business of $25M in revenue or less), 83% are surviving check-to-check. They don’t have enough to pay rent, payroll, or owners unless they make sales today. Maybe one day, you’ll make a big sale…and that profit will magically appear later. Except…it doesn’t. So how do you track cash if your bank accounts are “hidden”? Simple. You check on the 10th and 25th of every month. Why? Because then you’re not using the balance of your INCOME account as a vanity metric to determine the health of your business. Remember: your sales vary. If you can create a cash flow management statement that’s simple enough for you to see at a glance, you’ll have an instant “call to action.” Every 90 days…reward yourself. Take a profit dividend. Embrace the same discipline that big companies have with their shareholders. Celebrate your success! You turned a real profit. This is an abrupt shift. It’s a huge change. Mike is candid about this. Trying to implement profit first all at once is like trying to run a marathon with no training. “Don’t start running three times a week if you’ve never lifted a finger before!” Instead of raising the bar…what if we lowered the bar? Start with two steps: Set up your PROFIT account with the bank you already use. Then, begin taking just 1% of each sale and put it into your PROFIT account. “What comes last gets ignored. What comes first gets done. Always put your profit first.” Try Printavo: https://www.printavo.com Check out Printavo Merch: https://www.printavo.com/merch Read a recap of PrintHustlers Conf 2019: https://www.printavo.com/blog/printhu…#screenprinting#printlife#profit#printhustlers

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