Profit First Myths Debunked | My Business Won't Grow If I Take Profit First

13 Jul 2021 · 2 min

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1:30

In this short video, author Mike Michalowicz addresses a common misconception that implementing the Profit First system will stall a business’s growth. He explains that, contrary to belief, thousands of case studies show companies using Profit First actually grow faster than peers. The faster growth is not due to any magical financial formula but stems from behavioral changes: allocating profit first restricts available cash, forcing owners to be more selective and ROI‑focused in their spending, especially on marketing and investments. This disciplined approach reduces random, unfocused spending and leads to more effective use of resources, resulting in accelerated growth. Mike concludes with encouragement, reinforcing that entrepreneurs can adopt Profit First without fearing growth loss.

Chapters

Hi, I'm Mike Michalowicz, the author of Profit First. I'm thrilled to share that Profit first is in the hands of over a million readers now. But there's a problem. There's myths and mysteries circulating. So I'm producing a series of videos to help answer those challenges and questions that you may have and to set the record straight. One question or one challenge is people say, well, if I do profit first, I'm not going to grow. I'm in a growth trajectory. I can't impede that. I can't do profit first yet. And that is a myth. In fact, in our case studies, we have thousands of case studies consistently, businesses that implement profit first actually grow faster than their contemporaries. And that even blew my mind because it doesn't seem to make mathematical sense. It makes behavioral sense. You see, when we allocate money to profit first and we have restricted cash flow available for the spend, we are much more selective in how we spend. We are much more cognizant of the roi, the return on investment, on the choices that we make. So we make sure that the investments we're making in our marketing, actual payoff. When all the money that comes into the business is available to spend, we take a lot more potshots, it seems, and random tests of marketing like, hey, everyone else is doing Facebook or Instagram ads. I'll do the same. So businesses that take profit first grow faster than contemporaries because they're more selective, more focused on how to utilize their money, facilitating faster growth. Oh, and never forget this. You, my friend, you've got this. Good luck with profit first.