Mike Michalowicz explains that Profit First isn't set-and-forget. You need quarterly reviews to adjust your CAPS (profit, tax, owner's compensation, operating expenses) and advanced accounts like CAPEX and future employee funds. Work with a Profit First professional to keep the system tuned.
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 want to 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.
