I set up my Virtual Assistant business back in 2012, having had many years of hands on experience with the financial aspects of various business’s I thought I was well positioned to run my business. Which I was if you want to run your business the traditional way ie. Sales – Costs = Your Profits.
All good and well I hear you all cry, however that new shiny laptop that you spent £1,200 on and the new printer you spent £500 on has just wiped your profits out. You spent the money because it was in your account and possibly like me you can always justify spending money.
Welcome to Mike Michalowicz and his Profit First scheme. First let me tell you it is the first and only financial book that I have been able to read from cover to cover and understand, and more importantly feel comfortable with. I started reading one night in bed at about 11:30 and I was still reading at 4:00 the next morning, I was so excited that I couldn’t wait to get started, it all made sense and it all seemed so simple. Too simple in fact; but that’s the beauty of it, it is simple to operate and simple to make your profit and guarantee your profit.
Mike writes from experience having had several companies that he built up and sold, also having experienced having no money. It was the experience of having no money that made him reassess his life and habits and the way he ran his business’ that brought Profit First to life.
Profit First in simple terms takes the traditional accounting equation of Sales – Costs = Profit, and turns it on its head. Giving a new formal Sales – Profit = Costs (or what you have to spend). Hence the name of the book, Profit First. You take your profit from your incoming sales immediately, thereby leaving you with a Cost pot, curbing your spending and making you evaluate what you really need to run your business.
So if you feel you are working your fingers to the bone, and not making enough profit, or as much profit as you would like, take a read of Mike Michalowicz’s Profit First. It will change the way you look at your business and personal finances. I’ve never looked back, I’m getting excited just writing this review.
Emma Bennet runs www.ebsecretarialsolutions.co.uk