The Money Was Gone. Again.
Tunde stared at his banking app, his stomach twisting into knots.
£10 left. Again.
His shop was busy. Customers walked in every day. His shelves were stocked, and his sales numbers looked good. So why did he feel broke all the time?
The same cycle kept repeating itself.
Money came in. Bills, suppliers, rent, and expenses swallowed it up. He tried budgeting, cutting costs, and chasing more sales, but no matter what he did, by the end of the month, his account was nearly empty.
Was this what running a business meant—constantly struggling just to stay afloat?
Tunde was exhausted. He had poured his time, effort, and sweat into this shop, but at this rate, it felt like he was just working to pay everyone else. Something had to change.
That’s when he stumbled upon a book called Profit First by Mike Michalowicz.
Skeptical but desperate, he decided to give it a try.
What happened next changed everything.
Mike Michalowicz’s Wake-Up Call: A Lesson in Broken Business Finances
Tunde wasn’t the only one who had struggled.
Years ago, Mike Michalowicz thought he was a successful entrepreneur. He had built and sold businesses. He was making good money—or so he thought.
Then, one day, he checked his bank account.
Empty.
He had nothing left.
Reality hit him in the most painful way possible—through his nine-year-old daughter.
She walked into his office, clutching her tiny piggy bank in her hands.
“Daddy, we’ll be okay. You can have my savings.”
Mike’s throat tightened. He had spent years building businesses, making deals, and generating revenue. Yet, he was broke.
How did this happen? How could someone who had built multi-million-dollar businesses have nothing to show for it?
Sitting there with his daughter’s piggy bank in his hands, he realised:
The way he had been handling money was all wrong.
That moment led him to rethink everything he knew about business finances.
The Big Shift: Why Traditional Accounting Is Broken
For years, business owners have been taught this formula:
Revenue – Expenses = Profit
It seems logical, right? You earn money, pay your bills, and whatever’s left is profit.
But in reality?
There’s never anything left.
Expenses always expand to match income. If money is available, we spend it—on new tools, bigger marketing budgets, unexpected costs, or things we think will grow the business.
This is why most small business owners never see real profit—because it comes last in the equation.
Mike flipped the formula:
Revenue – Profit = Expenses
Instead of hoping there’s money left at the end of the month, he decided to take his profit first.
And it worked.
This simple change forced him to run his business more efficiently, control spending, and always have a profit.
How to Apply Profit First to Your Business (In 5 Steps)
This system isn’t complicated—but it does require a mindset shift.
Instead of treating profit as an afterthought, you set it aside first.
Here’s how to do it:
Step 1: Open a Profit Account (At a Different Bank!)
- Right now, open a new bank account just for profit.
- Name it “Profit First” so you never mix it with expenses.
- Use a different bank—out of sight, out of temptation!
- Why? Behavioral psychology shows that when money is harder to access, we’re less likely to spend it impulsively. If your profit is in your main business account, you’ll “accidentally” use it for expenses.
Step 2: Allocate a Small Percentage of Revenue to Profit
- Start with just 1% of revenue. If you make £1,000, put £10 into the profit account.
- It seems small, but the key is building the habit.
- By Month 6, even at 1%, you’ll have saved money that most businesses never do. You’ll naturally adjust to running your business on 99% of income.
Step 3: Run Your Business with What’s Left
- Whatever remains after profit is your budget for expenses.
- You’ll quickly spot wasteful spending and find ways to operate more efficiently.
Step 4: Build a Tax & Emergency Fund
- Allocate 5% of revenue to a separate account for unexpected expenses.
- No more panic when a fridge breaks down or a tax bill arrives.
Step 5: Reward Yourself Quarterly
- Every three months, take half the money in your profit account as a reward.
- The other half stays in savings, building a financial cushion.
This forces your business to be profitable from day one.
Addressing Common Concerns
“1% is too small—how does that even help?”
If your revenue is £10,000/month, 1% (£100) seems tiny. But by Month 6, even at 1%, you’ll have £600 in profit. Most businesses never save that much. The habit forces discipline. Over time, you’ll naturally optimize expenses.
“What if my income is seasonal?”
If your revenue fluctuates, allocate profit as a percentage of deposits. When £500 comes in, move 1% (£5) immediately. Consistency matters more than amount.
“What if I can’t pay my bills?”
Start small. If 1% strains your cash flow, adjust—but never touch your profit account. Instead, look at expenses—where can you cut back?
Tunde’s Before & After: How Profit First Changed His Business
At first, Tunde was skeptical.
How could he take profit before paying his business expenses? Wouldn’t that just leave him short on money for rent and suppliers?
But with nothing to lose, he decided to test the system.
Before Profit First:
❌ Money came in, but disappeared fast
❌ He panicked about rent every month
❌ No savings, no profit—just survival
❌ He felt like his business controlled him, not the other way around
After Profit First:
✅ He paid himself first, instead of last
✅ He had a growing profit account for emergencies
✅ Rent and expenses were covered—without panic
✅ His business wasn’t just surviving—it was finally growing
For the first time, Tunde felt like he was in control of his business instead of his business controlling him.
Now, It’s Your Turn.
Imagine checking your bank account and seeing a growing profit balance instead of wondering where your money went. Imagine running your business without that constant fear of cash flow struggles.
Start today. Open that profit account. Transfer just 1% of your revenue. See the difference.
