Diane GardnerFounder, Adept Business Solutions · Profit First Professional

Profit First Myths Debunked| Profit First Is A Set and Forget System

4 May 2021 · 1 min

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1:01

In this video, Mike Michalowicz, author of Profit First, dispels the common myth that the Profit First methodology is a set‑and‑forget system. He emphasizes that Profit First is a dynamic framework that requires regular attention, specifically a quarterly review of the Current Allocation Percentages (CAPS). During these reviews, businesses should reassess and adjust the core allocation accounts—profit, tax, owner’s compensation, and operating expenses—as well as any advanced accounts such as CapEx, future employee, retainers, and drips. Michalowicz advises working with a certified Profit First professional to conduct these quarterly sit‑down meetings, ensuring the system continuously evolves to maximize organizational health and shareholder value.

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Hi there, I'm Mike Michalowicz, the author of Profit First. I'm doing a series of videos to bust Profit First myths. One that circulates around is that Profit First is a set it and forget it system. It's not. Profit First is a dynamic system. We have over 500,000 businesses that have implemented Profit First, and it's very clear that you should revisit your Profit First CAPS settings on a quarterly basis. CAPS stands for Current Allocation Percentages. And you wanna adjust your profit, your tax, owner's comp, and OpEx, but also there's advanced accounts. Perhaps you have a CapEx account, future employee account, retainers, and drips. All these accounts should be readdressed to maximize the health of the organization and to serve the shareholder of the business. I strongly suggest you work with a Profit First professional. Once a quarter, have that sit-down meeting, figure out how the business can be further enhanced and tweaked, and make sure that Profit First is perpetually improving into perpetuity.