3-part series
Profit First
A three-part guide to Mike Michalowicz's cash-management system: why the traditional profit formula fails, how to set up the multi-account structure in Twin Owls, and the twice-monthly rhythm that turns it into a permanent habit.
3 parts · 18 min total
What you'll learn
- Understand the behavioral economics behind Revenue − Profit = ExpensesPart 1
- Set up the five-account system in your chart of accountsPart 2
- Choose starting allocation percentages (CAPs) and target ones (TAPs)Part 2
- Record allocations as journal entries and save them as templatesPart 2
- Use the balance sheet to track the system over timePart 3
Parts in this series
- 16 min readThe Framework That Flips Business FinanceWhy Revenue minus Profit equals Expenses works better than the traditional formula — the multi-account system and behavioral economics behind Profit First.
- 26 min readSetting Up Your AllocationsHow to determine your Current and Target Allocation Percentages, distribute quarterly profit, and eliminate business debt using the Profit First system.
- 36 min readThe Twice-Monthly RhythmHow to maintain the Profit First system with a consistent allocation cadence, protect owner compensation, and use your financial reports to stay on track.
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