Why “Profit First” Is the Book I Wish I’d Had When I Owned My First Business

An honest review of Mike Michalowicz’s Profit First method from someone who actually implemented it

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I discovered Profit First after I’d already sold my first business. Reading it felt like getting the answer key after turning in the test. The entire time, I kept thinking: Where was this ten years ago, when I was making decisions that would’ve been entirely different?

By the time Mike Michalowicz’s book came out, I was running MT Global Ecommerce—my side hustle as an Amazon FBA seller, moving shoes and clothing. That’s where I actually got to test the system. And here’s what I learned: it works, but only if you’re willing to feel uncomfortable for about six weeks.

The Problem Most Small Business Owners Don’t Talk About

Here’s the dirty secret about owning a business: you can be busy as hell and still wonder where all the money went.

Ever own a business where the revenue looked solid on paper, but you’re constantly shuffling money between accounts? Where you tell yourself you’ll pay yourself properly next month—and then next month comes and there’s always something else that needs the cash first?

The traditional accounting formula is:

Translation: Profit is whatever’s left over after you’ve spent money on everything else. And if you’re like most business owners, “whatever’s left over” is usually somewhere between “not much” and “are you kidding me?”The Profit First Method: The Flip That Changes Everything

Michalowicz reverses the equation:

It sounds like accounting gymnastics, but it’s actually behavioral psychology dressed up as a finance book. You take your Profit first—before you pay bills, before you buy that new piece of equipment, before you convince yourself you need to upgrade your software stack.

How I Implemented Profit First in My Amazon FBA Business

I was an Amazon FBA seller—Fulfillment by Amazon. I’d source shoes and clothing, ship them to Amazon’s warehouses, and they’d handle storage, packing, and shipping to customers through Prime. When a pair of shoes sold for $89.99, Amazon would take its cut—referral fees (typically 15% for shoes) plus FBA fulfillment fees (varying by size and weight, usually $4-6 for standard shoes)—and deposit the net amount into my account about two weeks later.

On that $89.99 sale, I might net around $72 after Amazon’s fees are applied. The moment that money hit my account, I’d immediately split it across separate accounts:

• • 5% to profit (started at 1%, worked up)

• • 15% to taxes (learned this one the expensive way)

• • 50% to owner’s pay (because I’m not running a charity)

• • 30% to operating expenses (buying new inventory, storage fees, software subscriptions)

So on that $72 net deposit:

• • $3.60 went to Profit

• • $10.80 went to taxes

• • $36 went to owner’s pay

• • $21.60 stayed for operating expenses

The magic isn’t in the percentages—those will vary based on your business. The magic is in the separation.

If you want to dive deeper into Mike’s exact percentages for different business types and his complete implementation strategy, grab the Profit First book here.

The Multiple Bank Account Strategy (That Feels Ridiculous But Works)

Michalowicz recommends multiple bank accounts. Like, five of them. When I first read this, I thought, “This is absurd. I’m a grown adult running a business. I don’t need to trick myself with multiple checking accounts.”

Reader, I needed to trick myself with multiple checking accounts.

It’s the financial equivalent of using smaller plates so you don’t overeat. You can’t spend what you can’t see. When your operating account only has $8,000 instead of $27,000, you suddenly get very creative about whether you really need that thing you were about to buy.

Better Questions I Started Asking

I started asking better questions:

• • Can I negotiate this?

• • Do I need this now, or am I just tired of saying no?

• • What’s the actual ROI, not the hopeful one?

Turns out, constraint breeds innovation. Who knew?

What I Wish I’d Known in My First Business

If I’d had this system when I owned my first business, I would’ve made entirely different decisions:

1. I Wouldn’t Have Expanded When I Did

We added significant new infrastructure in 2014. It was impressive. It was also a cash drain disguised as growth. With Profit First thinking, I would’ve asked: “Can we afford this and take profit?” The answer would’ve been no—and I would’ve saved myself a year of stress.

2. I Would’ve Been Honest About Pricing Sooner

When you’re trying to cover expenses with whatever’s left, you underprice to maintain volume. When you’re committed to Profit First, you charge what the work is actually worth—or you stop doing it.

3. I Would’ve Paid Myself Consistently

Instead of the “I’ll catch up next quarter” game I played for years. You know what happens when you don’t pay yourself? You resent your business. And resentment makes terrible decisions.

Is the Profit First Book Right for You?

If any of these sound familiar, yes:

• • Your business has revenue, but you’re still stressed about money

• • You’re not sure where the money goes each month

• • Tax time feels like a surprise attack

• • You haven’t paid yourself consistently in… a while

• • You keep thinking, “Just one more good month and then I’ll get ahead”

The system doesn’t care if you’re running a consulting firm, an e-commerce side hustle, a service business, or a brick-and-mortar operation. It works because human behavior is predictable: we spend what we see.

The Honest Part: What to Expect When Implementing Profit First

This isn’t a magic bullet. The first few months feel constraining—like your business is on a diet and you’re both hungry and cranky. You’ll want to “borrow” from your profit account. (Don’t.) You’ll convince yourself that this expense is an exception. (It’s not.)

But something shifts. You stop panicking. You start operating from abundance instead of scarcity, because you know there’s money set aside. The business still runs. In fact, it runs better because you’re forced to make smarter calls. By your first quarterly profit distribution, you’ll see it working.

How to Get Started With Profit First

You don’t need to implement the whole system tomorrow. Start with 1% to Profit. That’s it. One percent of every deposit goes straight into a separate account you pretend doesn’t exist.

Next month, make it 2%.

The point isn’t perfection—it’s building the habit of treating Profit as non-negotiable.

Final Thoughts on Profit First

Ready to stop wondering where the money went?

Get your copy of Profit First and start running a business that actually pays you.

Your future self—ten years from now, looking back—will wish you’d started today.