Dave WordenTriumph Business Solutions · Founder

Profit First Myths | You Can Take Your Profit First Distribution Early

28 Apr 2021 · 1 min

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1:14

In this short video, Profit First author Mike Michalowicz addresses a common misconception that business owners can withdraw their profit distributions whenever they wish. While it is technically possible to take money out of the profit account early, Michalowicz argues that doing so undermines the behavioral foundation of the Profit First system. He explains that the method relies on a 90‑day distribution cycle, which creates anticipation, reinforces discipline, and builds a “profit muscle” as cash accumulates before being released. The quarterly rhythm also mirrors how publicly‑traded companies distribute earnings, providing a familiar model for small‑business owners. The overall message is that adhering to the 90‑day schedule preserves the psychological benefits of the system and supports healthier cash‑flow management.

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Hi, I'm Mike Michalowicz, the author of Profit First. I'm doing a series of videos to bust Profit first myths that are circulating around Happy report. Over half a million businesses are doing profit first and that is growing exponentially and it's growing daily. Well, one of the common myths is I can take out my profit distribution anytime I need it. I can take it out early, I can take it out frequently. And the truth is you can't. Well, you can technically, but you shouldn't because it hurts the behavioral aspect. Profit first is a behavioral management system, manages cash flow, but it works with our own behaviors. And a 90 day rhythm is very important because what happens as money accumulates in your profit account, it builds that anticipation and that fortitude to wait, that strength of preserving profit while you work within what's truly available to operate your business. Then the 90 day cycle, the money is released and you receive as a shareholder, the owner of the business. So there's a dopamine release. It builds excitement and momentum. So we repeat the process again, by having a 90 day rhythm, it builds that profit muscle. And it's not only small businesses that do this. The big corporations do it too. If you own public stock, you may notice your distributions come out quarterly. Do the same for your business.