Author of cult classics The Pumpkin Plan and The Toilet Paper Entrepreneur offers a simple, counterintuitive cash management solution that will help small businesses break out of the doom spiral and achieve instant profitability. Conventional accounting uses the logical (albeit, flawed) formula: Sales - Expenses = Profit. The problem is, businesses are run by humans, and humans aren't always logical. Serial entrepreneur Mike Michalowicz has developed a behavioral approach to accounting to flip the formula: Sales - Profit = Expenses. Just as the most effective weight loss strategy is to limit portions by using smaller plates, Michalowicz shows that by taking profit first and apportioning only what remains for expenses, entrepreneurs will transform their businesses from cash-eating monsters to profitable cash cows. Using Michalowicz's Profit First system, readers will learn that: · Following 4 simple principles can simplify accounting and make it easier to manage a profitable business by looking at bank account balances. · A small, profitable business can be worth much more than a large business surviving on its top line. · Businesses that attain early and sustained profitability have a better shot at achieving long-term growth. With dozens of case studies, practical, step-by-step advice, and his signature sense of humor, Michalowicz has the game-changing roadmap for any entrepreneur to make money they always dreamed of.

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From An excerpt from CHAPTER I - THE LAW OF AVERAGES Human beings, when you average them up, are surprisingly alike. And human impulses are a fairly constant quantity. If an Average Man does one thing to-day and something else week after next, it is not necessarily because he has changed, but probably because there has been some kind of shift in conditions. As Robert W. Service observes: The thistledown that flits and flies could drift no hair-breadth otherwise. That is, the thistledown blows just the way it does because of the various physical conditions that control it - the topography of the earth, the altitude, barometric pressure- temperature, and velocity of the wind. If one were familiar enough with all these factors, and also happened to be clever enough at mathematics, it might be possible to figure the thing out, and place one's finger on the exact spot where the thistledown eventually would alight. Everything is Cause and Effect! So it is with people. Equipped with a knowledge of all items entering into the situation, we could forecast precisely how a man would react under a given set of circumstances. If it should be noted that ten persons a day slip and fall on the pavement in a congested area of a big city, and then some day twenty-five persons should fall, it would not mean that people on the average were becoming less steady on their feet, but more likely that the pavements had become more slippery. A newsboy starts over a route shouting his Sunday papers. He has two hundred papers with him, let us say, and can sell only one hundred and forty. To his disgust he has the rest left on his hands. On the following Sunday, therefore, he buys only one hundred and forty papers. And on that day, perhaps, he could easily have sold two hundred and fifty. He decides that man is an erratic animal about his Sabbath-day reading, and that there is no use trying to predict what he will want. But the chances are that on the day the demand was for two hundred and fifty papers, there was either bad weather to keep men indoors, or something in the papers of greater news importance than on the Sunday previous. With a record at hand of past performances and all present influences, it should be easier to tell in advance about an average man than about an average race horse; for, inasmuch as there are more men than race horses, it is possible to get the average a little closer. To know all the motives and whims that enter into the actions of an individual is practically impossible; but when we consider a crowd the task is less difficult. Individual peculiarities average up and are lost sight of in a big mass of persons. And the larger the crowd, the more definitely can we predict what an average person in the crowd will do....