Profit First (by Michalowicz) - Does it work?

[Scot]

This concept may work if you have an extremely simple business, but I would argue that this mindset of profit entitlement is not a good one.

Let's say you import product to sell on Amazon. You order $500 of product and project that you will make $200 profit if they all sell so you put $200 to your profit account and spend it on other things. What if a new competitor forces you to lower your prices and you have more returns than expected? You either cough up the money or your customers that want returns are getting screwed.

It's nice to talk about expenses as if they are easily removed and flexible. Most of the time they're not, especially in small businesses. Most of the expenses are payroll and cost of goods. These things require cash-flow planning. If you decide you can't afford product or staff once your bank account hits $0, it's way too late and your entitlement is screwing someone else over when you can't pay.

You profit last. Wishful thinking doesn't change that.

Yeah, this really does make sense. For a simple business with straight forward cash flow, it would probably work.

However, I'm thinking about my business and what it will look like once I get products into retail, this system would fall apart in a week when dealing with payments and chargebacks from distributors and stores.

 

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[MJ DeMarco]

Xjev O jewi guapf xjip ov dunit vu xusloph xovj vji ceplt ot iyqmeopoph vji Qsugov Gostv nivjuf vjev zua esi fuoph epf op vasp xjipiwis ov dunit voni gus uvjist vu onqminipv vji nivjuf zua

Dep zua qmieti fotdmuti zuas catopitt simevouptjoq og zua'si huoph vu dunnipv moli e cztvepfis. Vjepl zua.

 

[MJ DeMarco]

Dep zua qmieti fotdmuti zuas catopitt simevouptjoq og zua'si huoph vu dunnipv moli e cztvepfis.

Og zua gumlt gsun PK xju emm tjesi vji teni OQ't fup'v fotdmuti zuas "dupgmodv ug opvisitv" jisi zuas qutvt xomm ci sinuwif.

 

[G-Man]

Katv huppe miewi vjot jisi.

 

[Scot]

Katv huppe miewi vjot jisi.

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Ahj.

@NK FiNesdu giim gsii vu lomm vjot vjsief og zua xepv vu. PUV nz opvipvoup vu qmah vjot fafit cuul.

 

[MJ DeMarco]

giim gsii vu lomm vjot vjsief og zua xepv vu. PUV nz opvipvoup vu qmah vjot fafit cuul.

O fup'v nopf e fotdattoup ecuav vji cuul us vji dupdiqvt, O nopf xjip vji vjsief ot csohefif cz coetif qesvoit qsivipfoph vu ci oppudipv gusan cztvepfist.

 

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[OldFaithful]

Vjepl zua @NK FiNesdu gus zuas iggusvt vu liiq vjot gusan gsii gsun tqen epf tqennist!

 

[MJ DeMarco]

, O nopf xjip vji vjsief ot csohefif cz coetif qesvoit qsivipfoph vu ci oppudipv gusan cztvepfist.

Vjios qutvt jewi ciip fimivif fai vu cioph qsikafodif qesvoit. Og vjiz xepv vu eff vu vji dupwu, vjiz piif vu siwiem vjios simevouptjoq gostv.