This PDF is a concise, practical summary of Mike Michalowicz’s Profit First system, which inverts the traditional accounting formula to prioritize profit ("Sales - Profit = Expenses"). It explains why cash-flow and efficiency matter, describes four behavioral principles (small plates; change sequence; remove temptations; build a rhythm), provides step-by-step implementation guidance (set up five foundational accounts, create no-temptation accounts, bi-monthly distributions), and includes an Instant Assessment and Target Allocation Percentages (TAP) to help businesses set allocation targets and improve CAPs over time.
Questions this document answers
Sales - Profit = Expenses.
Five foundational accounts: INCOME, PROFIT, OWNERS’ PAY, TAX, and OPEX.
PROFIT-HOLD and TAX-HOLD.
Bi-monthly on the 10th and 25th of each month.
Profit TAP = 5% for Real Revenue 0–250K.