Profit First

Mike Michalowicz's Profit First flips the traditional accounting formula on its head. Instead of Sales - Expenses = Profit, Michalowicz proposes Sales - Profit = Expenses. By taking profit first and operating on what remains, business owners force themselves to find creative ways to cut costs and run leaner operations — the same way Parkinson's Law says work expands to fill the time available.

The system is elegantly simple: set up multiple bank accounts (Income, Profit, Owner's Pay, Tax, Operating Expenses), and on the 10th and 25th of each month, allocate percentages of revenue to each account. The profit account is untouchable for operations. This behavioral approach to accounting has transformed hundreds of thousands of small businesses from cash-eating machines into consistently profitable enterprises.