Mike Michalowicz answers how to handle cash already in your business when starting Profit First. Leave existing money alone and let it play out in current accounts. From day one of implementation, every new deposit goes through the Profit First allocation sequence to Profit, Owner's Pay, Taxes, and OpEx.
Welcome to Ask Mike. I am Mike Michalowicz, the author of Profit First and The Pumpkin Plan. This question came in from Ryan Moore, who has read both books. He started off with The Pumpkin Plan, scaled his business. Now he's looking to implement Profit First, but he's got a challenge. He has money in the business right now. What do you do with your existing money, Ryan asks? It's real simple. Just let it play out in your business how you've always been using it. You can simply move it to your OpEx account if you wish and just store it there. But every deposit going forward, you do follow the Profit First system. It goes into income and it gets allocated out. Any money you had prior to implementing Profit First, just play it out as you were before. That's it.
