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Sep 12, 2018

Today on Pawn Leaders, I have Mike Michalowicz, author of the books Profit First, Surge, The Pumpkin Plan and his newest release, Clockwork. By his 35th birthday Mike had founded and sold two companies, a bunch of private equity and another two Fortune 500 companies. Today he’s running his 3rd multi-million dollar venture; Profit First Professionals. Mike is a former small business columnist for the Wall Street Journal and a former business makeover specialist on MSNCB. He has travelled far and wide, speaking with thousands of entrepreneurs.

[02:14] What is Entrepreneurial Poverty? “The misperception about how successful and the amount of money entrepreneurs have or earn.”


[03:51] “The next time someone asks ‘how big is your pawn shop?’ Say, ‘Let’s talk about how healthy it is!’”


[04:06] We have been told that profit is the bottom-line, but if that’s the case, it means that consideration can wait.


[04:48] Sales – Profit = Expenses


[06:39] The core concept is that when revenue comes into your business, we take a pre-determined percentage of that money and allocate it towards profit.


[07:59] We have to force in this gap of removing the profit, hiding it away from ourselves and forcing our business to thrive off the remainder.


[08:29] Most people say they’re starting a business to be rich, but how do you define what success is and when is the next plateau?


[11:44] What can we do to dictate a higher margin?


[12:52] Thinking about your reason for growth is looking at being more profitable. You must focus on what drives that profit.


[14:08] People who focus on profit first grow faster than their competition, because they focus on the things that drive profitability.


[17:02] When there is a lack of profitability, we go into survival mode


[19:15] How can a pawn broker think profit first?Determine how you manage your finances.”


[20:08] Setup different accounts for different purposes (The Foundational 5):

  1. An Income Account
  2. Profit Account
  3. Owner’s Compensation
  4. Taxes Account
  5. Operating Expenses Account


[22:14] We need to vet our customers.


[25:45] The Profit First system presents problems before they become issues.


[26:41] Having a financial heart attack opens your eyes to what you need to change in your business and managing your finances. However, it never has to get that far.


[28:25] Allocate 1% of your income to your profit account and over time you will build your financial muscle.


[30:00] Suffering is a sign that there is something wrong with your business.


[30:39] It is easier to do things that aren’t working, that you’re familiar with, than to do something new that will bring better results.


[31:22] Try something new; buy the book Profit First and see how it changes your life.


Visit or search for “Mike Motorbike” and the first result will lead you to the website.


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