Wanna join the Feminest book club? Of course you do. ;)
The first Monday of every month, I'm selecting a feminist, business, or self-help book to review for that month. And, rest assured — if I'm featuring it — there’s something you oughta know! This month I'm a little behind due to moving our lives to Australia! But I'll be back on the horse for next month!
Last month I covered THE 33 BOOKS I READ IN 2017. It's a long list and a lot of the titles I'm sure you've heard of. So be sure to check there first to see if I think it's worth a read!
This month I'm covering Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine, by Mike Michalowicz (AUS + USA)
Here are my major takeaway's.
Takeaway #1 - Every Industry Needs To Pay Attention To Their Money Margins, No One Is Exempt
Mike talks about this a lot in his book and I've also found it to be true with the businesses I've worked with. Some people think their industry should deal with different types of profit margins or maybe not pay attention to their money at all. The point of having a business is having money. If you're not interested in making money and/or you're just bored looking for something to do with your time, start a hobby. Seriously, money has to be a focal point of your business.
Takeaway #2 - Business Percentages Breakdown
This. This right here is real damn life.
One of the first things I look at when I determine the health of someone's business is their revenue and expenses. You can be making 1 million dollars and if your expenses are 1.1 million? Well... you can do the math.
These percentages are great ways of looking at your money in a very practical way, there's nothing new here except for the 3rd "Profit" row. Which is kind of the whole point of his book, which honestly, I've only just kind of adopted, and I'll talk about that in the next takeaway.
The percentages that I think are the most important to look at are the expenses and the taxes. Are you setting aside 15% of your revenue to taxes? And how do your expenses look? Are they more or less than 30% of your revenue? Those two things right there will give you a serious leg up in getting your business to a healthy flow.
Takeaway #3 - Money Flow
I'm really into how he has you set up all different accounts so your money flows automatically from one account to another. Unfortunately my month to month is so drastically different I have to do this manually.
At the end of the month I total up my revenue and then I total up my expenses. Then I set aside 15% for taxes. Then I see how my expenses percentage looked. If it's over 30%, I dig in and figure out why. For example, one month I bought a new laptop, which threw my percentages off. But I still want to make sure that overall in the year I'm at or below that 30%.
I haven't set up a profit account yet. But it's so easy to set up a savings account (I use Chase), I may just do that right now.
Takeaway #4 - Batching
Batching means scheduling specific tasks at specific times instead of trying to react to everything as it happens. Mike talks about doing this especially when paying expenses and choosing to do it twice a month, the same time every month. That way you save time when you have all your spreadsheets up and ready to go. This way you also can see if you're making double payments or if there are payments you don't want to be making anymore. It helps you keep it all straight.
Batching in general is a great way to run your business. I'm batching blog posts right now as I type! You can batch emails, client work, marketing, social media posts. The world is your batching oyster.
Mike will probably be the first to tell you that he's one big ball of cheese but he does have some great insight. This book is great for people who are new to business and growing and figuring out money allocation and margins.
Now, for your thoughts! If you’ve read Profit First, what would you rate it? Do you agree or disagree with anything the book has to say?
Have a book suggestion? Let us know in the comments section below!
Next month I'm featuring The Universe Has Your Back: Transform Fear to Faith (AUS + USA)! Read it with me!