Mike Michalowicz explains how to handle cash already in your business when you start Profit First. Existing money stays where it is or moves to your operating expenses account. Only new income going forward gets allocated by the Profit First percentages.
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 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 find. The Profit first system goes into income. Then it gets allocated out any money you had prior to implementing Profit First. Just play it out as you were before. That's it.
