Most Important Concepts:

• Sales - Profits = Expenses

How I Can Use This Information:

Chapter Recap:

Introduction

1 - Your business is an oit-of-control cash eating monster

• Sustained profitability depends on efficiency.
• Since the dawn of time businesses have kept track of their earnings using essentially the same method:
  • Sales - Expenses = Profit
• Your business doesn’t have to be a Frankenstein miracle that turns into a monster.

2 - The core principles of profit first

• Four core principles; Use small plates, Serve sewuentially, Remove temptation, Enforce a rhythm.
• Parkinson’s law, the demand for something expands to match its supply. When there is less money, you will automatically run your business more frugally and innovatively.
• When profit comes first, it is the focus & never forgotten.
• New formula:
  • Sales - Profit = Expenses
• 5 foundational accounts: Income, Profit, Owner’s compensation, Tax, Operating Expenses.

3 - Setting up profit first for your business

• Set up the 5 foundational accounts.
• Set up 2 external savings accounts with a bank other than your regular bank. Profit hold & Tax hold.

4 - Assessing the health of your business