Being an entrepreneur, your business is your baby, your kid, your adolescent or your grown up baby.
If you want to be in the business game longer than just for a hunch, you need to make profit.
Mike Michalowicz was the first to describe the phenomenon profit first, to create healthy businesses.
In contrast to the known financial model (revenue – cost = profit) he created a new model: revenue – profit = cost.
This is a game changer, because entrepreneurs behave like a tube of toothpaste when it comes down to cost: if there’s much cash, we spend, if there’s not so much, we survive for multiple consecutive days/weeks/months with the tiny bit we have.
Profit first changes the way you think about profit and about cost.
Because you remove the profit first (book it into an account that’s ‘hard’ to access), you can only spend what you have left.
Start with 1% profit. If you can do it with $1000, you can do it with $990 as well. The next quarter it’s 2%. Then 3%, op until a healthy percentage that fits your branch.
It makes your business healthy.
Moreover, it works the same for your personal finance.
You should try this, it’s liberating.