Profit First

I started reading a book recently which is completely messing with my mind, in a good way! The book is Profit First by Mike Michalowicz (click the image to see it on Amazon)

His story is raw, telling about how arrogant he was went he sold his 2 profitable businesses, buying 3 cars (not realizing that he’d sold the golden geese which would cover the monthly expenses on the cars). He hit rock bottom, and then started digging… I won’t spoil his thunder – just get the book.

The part where I’m currently at it on the Profit First concept – and it’s something that both business owners, entrepreneurs and even employees can implement. It’s simply this: from incoming funds (invoices or salary), immediately take 1% of that and put it into an account which you can’t touch easily. And leave it alone – just add to it every time you receive money.

I know my granny always tried to drum the idea of saving into our heads, but it was always for a higher percent – and that just seemed so unattainable, especially if you’re not making ends meet as it it. 1% is do-able. If you receive R1,000 you will manage on R990.

So give it a try and see how quickly the little nest egg starts to grow.