What is your belief and understanding of profit within your business? Do you have systems set up so that your business can run on its own without your presence? Do you want to learn how to put your profit first and run your business like clockwork?
In this podcast episode, Joe Sanok speaks with Mike Michalowicz about how to make sure you are always making profit first, how to get the point that your business is running itself and like clockwork.
Meet Mike Michalowicz
Mike Michalowicz (mi-KAL-o-wits) is the author of Profit First, Surge, The Pumpkin Plan, and his newest release Clockwork. By his 35th birthday, Mike had founded and sold two companies – one to private equity and another to a Fortune 500. Today he is running his third multi-million dollar venture, Profit First Professionals.
Mike is a former small business columnist for The Wall Street Journal and the former business makeover specialist on MSNBC. Over the years, Mike has traveled the globe speaking with thousands of entrepreneurs, and is here today to share the best of what he has learned.
Mike Michalowicz’s Story
In This Podcast
In this podcast episode, Joe Sanok speaks with Mike Michalowicz about how to get your business running like clockwork and making decisions in your business that are based on taking the profits first.
The formula we’re told to follow is fundamentally flawed. We’re told that sales minus expenses equals profit – which tells us that profit is the last consideration.
Profit is called the bottom line or the year end, and these are terms used to identify profit as not significant now but in the future. In his book, Mike flipped the formula and says that sales minus profit equals expenses (preallocating money for it’s intended purpose, in this way you won’t be spending money aimlessly).
For your practice set up multiple accounts:
- Income account (deposit only account, never pay a bill from here unless you are doing an allocation)
- Profit account (reward mechanism, shareholder distribution)
- Owners compensation (pay for being an employee in your company)
- Tax responsibility
- Operating expenses (pay bills for business operations)
I thought the heroic thing was to be a workaholic, I had pride in it.
This was a study in how to have a business run itself, with the solution being organizational efficiency (designing the outcome you want):
- Delegation – the assignment of outcomes
- Design – having a clear outcome of what you want to achieve for your business
The 4 Week Vacation
For a business truly to run itself, you need to prove it. To prove it is to extract yourself from the business.
This means there is no dependency on the owner, leaving physically and also digitally disconnecting from the business for 4 weeks.
Things to Consider
You can increase your profitability by looking at your historical numbers. If your historical profit has been zero then you should set aside 1-2% and continue increasing it as time goes on.
Start delegating your administrative type work and also bring on virtual/part time help.
Books by Mike:
Other books mentioned in this episode:
- Dr. Julie Schwartz Gottman on Eight Dates: Essential Conversations for a Lifetime of Love | PoP 349
- The Focus Funnel
- Join a Mastermind
- Next Level Practice
- Killin’It Camp Early Bird tickets
Meet Joe Sanok
Joe Sanok helps counselors to create thriving practices that are the envy of other counselors. He has helped counselors to grow their businesses by 50-500% and is proud of all the private practice owners that are growing their income, influence, and impact on the world. Click here to explore consulting with Joe.
Thanks For Listening!
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