If your company needs a turnaround, Profit First is the book that will fix it.
It’s a gritty, real book from an entrepreneur who has been broke, rich, and lucky. At different times. He admits it all.
Every day on my Facebook feed, I see people “reinvesting” money into their businesses, or making other excuse type things. My friend Tim came across and shared a good one this week.
This is what we all do. And it’s stupid and wrong.
Mike will convince you of that. And show you how to not be like that from day one.
The book opens with some pieces of Mike’s story of going broke. I was the same way at Simplifilm. It created stress, delusion, depression and everything else rotten. I couldn’t turn a profit so no matter what I sold it truly didn’t matter.
Had I read this book, I might still be doing that business, because it’s that good.
The Entrepreneurial Condition
The book talks about “bank balance accounting.”
The bank balance accounting is this: when you have money you buy things. You don’t worry too much about the other details. Every entrepreneur does this and “just wings it.”
For me it was renting a massive office and insisting that contractors showed up there. Buying desks and furniture I didn’t need and living this visible delusion.
This created an insatiable monster I could never feed.
The benefit of this book is that it talks about EXACTLY what’s wrong with the entrepreneurial mindset. Our destructive optimism means we feel like we can sell our way out of anything. Mike’s not some guru, he’s been hit and you know it. He knows that a business will be a monster that will consume every resource because we justify it all.
It’s either a reward that we’ve “earned” or a reinvestment in the business.
Both are justified, even when we have no business doing it. And so we spend based on our bank balance, even when there are bills coming later.
It’s All Stuff You’re Doing Anyway
I’ll leave the spoilers out of it, but this system is working well for ICYD because it’s based on what entrepreneurs do anyway: we look at our bank account balance to decide what money to spend on what things. Now, we have a system for making that information serve us.
That doesn’t change. Doesn’t need to. What changes is where the money goes, how far you’re removed from it, and what the money will do for you.
I believe – with all of my heart – that this book will change lives, save businesses and even save marriages.
If you’ve ever felt the “boom/bust” part of a business, go read Profit First.