Business Finance Masterclass: This Cash Management System Increases Profits For Every Small Business Owner!!

Business Finance Masterclass: This Cash Management System Increases Profits For Every Small Business Owner!!

Business Finance Masterclass: This Cash Management System Increases Profits For Every Small Business Owner!!

What if you could implement a cash management system today that guarantees profitability, automatically sets aside money for tax season, and ensures you don’t overspend on expenses? In this episode, Hala is joined by Mike Michalowicz to break down Profit First, the cash management system that has helped hundreds of thousands of small business owners increase their profits, or generate a profit from day one.

Mike Michalowicz is the entrepreneur behind three multimillion-dollar companies and is an author of business books for entrepreneurs and small business owners like Profit First, Clockwork, The Pumpkin Plan, Fix This Next, and Get Different. Mike is a former small business columnist for The Wall Street Journal and regularly travels the globe as an entrepreneurial advocate. He became a business author with a clear mission: eradicate entrepreneurial poverty.


In this episode, Hala and Mike will discuss:

– What happens when you constrain a resource

– How to think of profit as a habit

– The value of practicing fund preallocation

– The five bank accounts every small business owner needs

– The difference between an ownership salary and profit

– How much money should you put toward profit?

– Why you should compress your operating expenses

– How to pay off debt

– How Relay can help you implement profit first with ease

– And other topics…


Mike Michalowicz is the creator of Profit First, which is used by hundreds of thousands of companies across the globe to drive profit. Today, Mike leads two new multimillion-dollar ventures, as he tests his latest business research for his books. He is a former small business columnist for The Wall Street Journal and a business makeover specialist on MSNBC. Mike is a popular main-stage keynote speaker on innovative entrepreneurial topics; and is the author of Get Different, Fix This Next, Clockwork, Profit First, Surge, The Pumpkin Plan, and The Toilet Paper Entrepreneur. Fabled author Simon Sinek deemed Mike Michalowicz “…the top contender for the patron saint of entrepreneurs.”


Resources Mentioned:

Mike’s Book Profit First:


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[00:00:00] Mike Michalowicz: I was doing a keynote two days ago. I asked audience, I said, why? Did you start a business? And they all shared the same two reasons, and I hear all the time. I started my business for Financial freedom and I started for personal freedom. I said, who's experiencing that in this room? And there was 1500 people in the room.

I would say six hands went up. We all have this dream of financial freedom and personal freedom, and none of us have it. Most businesses are so financially strapped. You have to work your ass off just to get through the day. As a resource expands its availability. The more time we have, for example, the more we consume.

And it's true for money. And that's why so many businesses, as they see their sales increasing and revenue increasing over time, they get really excited, but almost uncannily expenses are increasing at the exact same rate. Well, that's a natural human response to subconscious response. We don't even realize we're doing it.

But more cash means I have more to spend. We keep on spending To reverse this trend, we simply need to take profit first. Profit is not an event, meaning eventuality. Profit is a habit.

[00:01:14] Hala Taha: This episode is brought to you by Relay, the number one bank for small business owners. Sign up today by visiting relayfi. com slash profiting. What if I told you you could implement a cash management system today that guarantees profitability, automatically sets aside money for tax season, And ensures you don't overspend on expenses?? well that's exactly what you're going to learn in this business finance masterclass. Today, , I'm joined by Mike Michalowicz to break down Profit First, the cash management system That has helped hundreds of thousands of small business owners  increase their profits or generate a profit from day one. enjoy. .

[00:02:00] Hala Taha: I'd love to dive right into the topic of today. You've got a classic business book. It's called Profit First. It was released in 2014 and since then, it has totally taken the business world by storm with hundreds of thousands of businesses using your method to drive profits. And fast forward nearly a decade after release.

I still have many extremely successful entrepreneurs who come on my show and they reference your book. So we've mentioned your name several times on the podcast since you came on in episode 52, and there's so many businesses that handle their cash management using your system. In fact, my company, yeah, media uses your system for accounting and it's actually considered a Bible at YAP Media in terms of our cash management.

So let's start off with a basic question. Why do you believe profits come first in a business? 

[00:02:47] Mike Michalowicz: Because it is human nature. When something comes first, it's prioritized. And when something comes last, it's ignored or it's the man syndrome. And so the analogy I use Hala is imagine you love your family, which I know you do, and you imagine saying, I love my family so much.

I decided to put them last. I mean, it's absurd. I love them so much. I put 'em first. I put my health first. Things are important. Come first. What I noticed was studying the standard formula. The gap that Joan accepted principle for counting is that profit comes last and it's called the bottom line in the year end and execution.

What this means, and maybe it's a subconscious response, but most entrepreneurs wait until the end of the year. You know, it's April 15th now, and they're like, I don't have any profit maybe next year. So profit is only considered at the end of the year when we fail to get it. We wait until the next year.

Why Teach and profit first is that profit comes out of every transaction. So profit is not an event, meaning eventuality. Profit is a habit. I'm gonna 

[00:03:41] Hala Taha: dig deeper on all of these things. Let's first start about the traditional formula. So it's usually sell as much as you can, take away your expenses, and then the rest is your profit.

But you say, this doesn't work because like you just said, it goes against human instincts. 

Because if we are saying that profit comes last, we're gonna think of it last. We're not gonna think of it first. So talk to us about the Parkinson's law and the primacy effect and how that actually impacts us from being able to use the traditional method.

And get our profits. Did you did your research. Yeah, of course I did. Micah. 

[00:04:15] Mike Michalowicz: I love it. Those two things are such important behavioral components. So Parkinson quick history lesson, he's, he's a theorist from the 1950s studying human behavior and finds an interesting phenomena. As a resource expands its availability.

The more time we have, for example, the more we consume. So if you and I are discussing an agreement, and I'll say, I'll get to you in one week. It'll likely take me a week. If you and I discuss the same agreement, the same people, the same parameters, but I say, I'll get to you in one day, I'll likely get to you in one day.

So as we constrain a resource, we become more efficient. It's true for time. It's also true for like food. The more food put in front of us, the more we consume. And it's true for money. And that's why so many businesses, as they see their sales increasing and revenue increasing over time, they get really excited.

But almost uncannily expenses are increasing at the exact same rate. Well, that's a natural human response. The subconscious response, we don't even realize we're doing it. But more cash means I have more to spend. We keep on spending. So most businesses get stuck in this loop of. Constantly trying to sell their way to profitability and success and they never will get there 'cause of Parkinson's law.

Now the primacy effect means the next thing we see has a heightened importance. So as money comes in, those deposits come in, we look at it and say, oh, I got some money finally I can do. And whatever that due is, is the next important thing. Uh, we need to get new technology, we need to hire that employee, and we deplete the account immediately.

So those two things in that scenario work against us. By taking our profit first. When sales comes in, we take a predetermined percentage of that money as revenue and remove it away. It constrains the supply of cash. Now, Parkinson's law becomes our ally. So we're like, oh, I don't have $10,000 deposits. I only have 6,000 available to operate my business.

And we constrained and control our spending around that. And that 4,000 has been reserved for profitability. 

[00:05:57] Hala Taha: Something else that you teased out is that taking out profits is not an event. It should be a habit. So can you talk to us about how we can actually make this more of a habit rather than thinking about taking our profits out five years down the line?

[00:06:11] Mike Michalowicz: I think we look at profit in chunks by default, we're like, ah, you know, I, if I get one more client or I get the big sale, finally we're gonna get a chunk of profit. But the reality is profit is something that means, needs to be a habit or habitual. We build at it. It's kind of like saying, I'm gonna go transform my body by going to the gym one time and work out like an animal, and I'm gonna come out with a perfect body.

We know that. To have transformational effect on our body. We need to exercise regularly for sustained and perpetual period. Well, this is true for the fiscal body, if you will, of the business. It rarely, rarely happens that you have that huge client and all that money comes in, and now you can reserve it and sit back and go on Easy Street.

What we need to do is every transaction, every time there's a deposit, a predetermined percentage goes toward profit. What happens is we start reverse engineering profit. If I want my company to have a 20% bottom line profit, and I get a thousand dollars, I know 20% is $200. $200 is hidden away, and now I'm reverse engineering that profitability.

I have 800 left. That's why I have to work with, to run my business. 

 it becomes this habitual reverse engineering of profitability, and it assures profitability. You'll always be profitable because you took your profit 

[00:07:19] Hala Taha: first

. And this is really important, guys, 'cause this is actually how you build Financial Freedom as a business owner and entrepreneur.

It's why you got into entrepreneurship in the first place. You didn't get into entrepreneurship to build a job for yourself where you're just on a hamster wheel. This actually allows you to get rewarded, pull out money from your business and build financial freedom. 

[00:07:39] Mike Michalowicz: Know, holla. I was doing a keynote two days ago.

I just got back and the large audience, I asked the audience to say, why did you start a business? And they all shared the same two reasons. And I hear all the time, I started my business for financial freedom. I don't wanna worry about bills. And I started for personal freedom. I wanna do what I want when I want.

I said, who's experiencing that in this room? And there was 1500 people in the room. I would say six hands went up. No one's experiencing. We, we all have this dream of financial freedom and personal freedom, and none of us have it. It's the reverse. Most businesses are so financially strapped that you have to work your ass off just to get through the day.

To reverse this trend, we simply need to take profit first. And by the way, this is nothing new. It's new to business, but the belief of the pay yourself first principle has been around forever. So I simply took it in the established concept in personal finance. Pay for your retirement, first, reserve for your savings.

First, live off the remainder. I simply applied it to business and it works. 

[00:08:32] Hala Taha: It does work. This is why hundreds of thousands of businesses use it. So at the end of the day, profit First is really a cash management systems and one of the most innovative parts is the fact that you say you actually need to split up your bank accounts into smaller chunks.

And this is something that we've actually adopted at yet Media. We love it. It's really helped improve the things that we do in terms of the transformation. Before we were doing this to after. Things are running a lot smoother and peace of mind as a business owner for myself as well, knowing we have like money for taxes, money for this, it's like I'm not constantly worrying about stuff.

So for people who are unfamiliar, what is the advantage of actually taking all your money and splitting it up into different accounts? And then we can get into the, the types of accounts and everything. 

[00:09:16] Mike Michalowicz: Sure, sure. So the technical definition of this process is called fund allocation. Meaning we're taking money and assigning it a responsibility before we spend the money.

So the concept is that we accept multiple accounts at your bank, and I gotta underscore this a million times. That is fundamentally the key. We do this at your bank because it's a behavioral intercept. So most entrepreneurs manager business by login into bank account. We have accounting statements, but we don't read those.

We have a simpler system for most of us. Log into the bank account and see what we have and spend accordingly. By having multiple accounts at the bank determined or designated for different responsibilities, we know what that money is intended for and it will, before we spend it, we know how to spend it.

And that's the key. 

 Now, the reality is for most entrepreneurs, if they don't have profit first is they have a single primary checking account.

Their bank may have another one for payroll or something, but they have one or two bank accounts. What happens is all the funds go in there. They pay all the bills from it. And what I equate this to is imagine Thanksgiving dinner and you cook a Turkey or something and then instead of carving up the Turkey, you say to the guest, everyone fight for it.

Whoever wants it most wins everyone for themselves. And that's absurd. We instead carve the Turkey so everyone can get a piece of Turkey on their plate. Well, the same thing with our business. If you've one serving tray of cash, And you tell your business whatever needs it. Next we need to hire, we need computer technology.

Fight for it. They will consume the whole Turkey and the rest of the business will starve to death. So what we're doing in the system is we're setting up plates where every guest at the business table, which we have all these different accounts for, we carve it up and that way everyone entire business is fed in healthy.

[00:10:51] Hala Taha Awesome. So speaking of these plates, there's, there's really five plates or five accounts, that's main income, profits, owner salary, taxes, and operating expenses. So I think my listeners are really smart. All of these seem decently straightforward except for profits and owner salary. What's the exact difference between those two?

Because especially if you're a solopreneur, you might think profits is the same thing as your salary. 

[00:11:14] Mike Michalowicz: It's owner's comp and it's not. Yeah. So profit is a reward for taking the risk of starting a business. Here's the the scary statistics. Only 17% of the population will ever take the risk of starting an operating a business, and only 20% will do it successfully for at least five years.

So that means 20% times 17%, which is roughly 3%. Only 3% of the world population will ever run a successful business. 97% of the population is looking to work for a successful business. Our job as entrepreneurs is creator jobs and the profit account is a reward, a thank you. We're taking on this risk that only 3% of the people ever pull off.

So just like if you invest in private stock, I, I have um, or public stock, I own some Ford stock. Ford sends out a distribution check, profit distribution. I don't run to the Ford factory and say, oh, I gotta earn this now. And I definitely don't return it to 'em and say, oh, this is a plow back, let's go forward.

I say, I've taken risk. I want the value to increase, but it could decrease. This is a reward for doing what almost no one else will do. Our business. We hope the value will increase over time, but we've taken the risk. It may collapse. Profit is a thank you for supporting our global economy. Now, owner's salary or owner's compensation is the pay for the work you do within your business.

So most small business owners work within their business and if ha, if I had to replace you, I suspect you're the best salesperson for your organization. You're the best spokesperson. You're the most knowledgeable. You work your tail off for this business. What would I have to pay a person to replace you to do the same thing?

A hundred thousand two a million dollars is, it's a big freaking number. That's all I know. Well, that's the number you deserve to make because your company found you. It has you. Your company must pay you, and if it doesn't pay you appropriately for what you're doing. It's a matter of time before we resent it.

Most business owners say, ah, screw my salary. I gotta pay everyone else. And years later, like, I hate my company. I am starving here. So owner's salary is to pay you for the work you do. This is what your lifestyle should be adjusted to profit is the bonus for taking on risk that almost no one will do 

[00:13:08] Hala Taha: So again, the five buckets are main income profits, owner's, comp, taxes, operating expenses, and we have to put percentages for each one of them. So why don't we start with profits? 

How do we determine the ideal percentage that we should allocate towards profits?

[00:13:25] Mike Michalowicz: So what I did, and I'm not trying to be pitchy here, it's in my book, but you can get online for free. I and my team analyze a thousand businesses in all different industries, media, industry, restaurants, manufacturing, professional services. We found that there is a percentage that the fiscally elite, the best performing companies in any industry will do.

Now it's based upon different revenue ranges. So a smaller business, say you're a brand new startup, you make 250,000 or less in revenue, which in. Service industry is typically a single person operation. If that is your case, you'll probably take a diminished profit of maybe 10%. You'll take an expanded percentage of owner's salary, maybe 50%, you'll reserve 15 for tax.

The tax account and business is your business can reserve your tax liabilities and responsibilities regardless of your formation. So you can have an L L C or sole proprietorship or an escort. Your business can't pay your taxes and talk with a tax professional. How you distribute it is unique and different in each case, but the percentage will change.

So once you hit a million dollars, you're not putting 50% toward profit or owner's compensation where you take a $500,000 salary. It may be reduced. Maybe now it's 20%. Once you get to a 10 million company, maybe the owner's compensation is 10%, about a million dollars a year. So the percentages adjust.

What I suggest people do is look at the resources, what we analyze, but don't necessarily start there. If you're an established business, a target is simply where we're headed. You have what we call caps or current allocation percentages. This is your starting point. If your business has never paid a profit before and we're suggesting you can get to 20% in profit, let's not start there.

Let's start next month by going to 1% after a quarter. Let's go to two and 3%. Maybe the rollout takes us a couple years to get that 20%. It allows your business time to digest and adjust to the taps that we're targeting.


[00:15:12] Hala Taha: I've got to say guys, implementing Profit First into my business was a night and day difference. The clarity I have about our financials. How much profit we're generating, how much money we've set aside for tax, how much we can spend on expenses. It's given me so much peace of mind that I've never experienced before as a business owner. . And that's why I'm so excited to have partnered with Relay. Relay is an online banking and money management platform that is the official banking partner of Profit First.

With Relay, business owners can create up to 20 individual accounts and automate their profit first allocation so that when money comes into your income account, it automatically then gets distributed to your other accounts based on the percentages you've set up. 

 The best part is, especially if you're trying to follow the profit first methodology and you have to set up all these different accounts, there's no account fees, there's no overdraft fees, no minimum balances, and you can make unlimited payments via ACH wires or bank checks.

They also have great integrations for syncing with accounting softwares like QuickBooks, which we use at Yap Media, and Xero. If you're a small business owner, you need banking that is truly built for your business. if you have even the slightest interest in profit first or if you simply want a banking solution that was designed specifically for the needs of small business owners,, I highly recommend Relay.

It's easy to apply online and it's absolutely free. You can sign up today by visiting relayfi.

com slash profiting. Again, that's relayfi. com slash profiting. And the link is in our show notes.  Give them a try. I hope you do.  


[00:16:40] Hala Taha: I love that, and I wanna kind of dive deeper on that point. So you're saying take baby steps. Just start off with saying, all right, I'm gonna allocate 1% to profit, 2%. At the same time, we should be reducing our operating expenses by the same amount. Right? So explain to us why we should do that. Yeah.

[00:16:56] Mike Michalowicz: That's the kind of the, how the equation works is. When you take a percentage away for, or add it to something, you gotta take it away from something else. So in most cases, not all, but most cases, we will compress operating expenses. What our research has found, and we have over 700,000 companies have deployed profit First to give context.

Most businesses run far too rich in operating expenses. They're spending upwards of 95% of inbound income was right back out the door to operating expenses, and there's a meager amount left for the owner. What we also found is that the spending is, Kind of aimless. It's just like, oh, I heard we should be running Facebook ads.

'cause other people told me I'll do this and I'll do that, and there's no concentrated effort in a certain area. What's interesting is we start constraining the operating expenses, so we allocate more toward profit and so forth. Reduce that opex from 95% to 90 and then 80 and so forth. The business owner, their behavioral response is interesting.

It doesn't reduce the impact that the business is having. Instead, what it does is requires 'em to focus more on what is having impact and they make betts on the Sure things. Instead of just randomly testing stuff, they say, you know what? We've had success here. Let's do more of that. Or let's bring in an expert that can tell us actually how to do Facebook ads so we just don't blow money out the the window, and they start becoming more focused.

The greatest surprise for me, I never expected. This is businesses that deploy profit first and reduce their operating expenses in the vast majority of cases grow faster than their contemporaries who aren't doing profit first, which I'm saying is most profitable companies grow faster than unprofitable or check by check surviving companies.

So it's interesting you think it takes money to make money. It's what we've been told. You need to spend as much as you can, and that's not the truth. You need to be innovative as much as possible, and as you control and constrain opex, you become more innovative, more prudent in how you spend that 

[00:18:44] Hala Taha: money.

 I think that everybody could look at their operating expenses right now and find one to 5% of like quick things that you can do to just streamline things, reduce your costs, and then allocate that towards profitability. And said, it could be just cutting softwares that you don't use anymore.

Looking at user seats on all your different platforms and, and realizing that you're paying for 10 seats that you don't use, and just little things like that. 

[00:19:07] Mike Michalowicz: So true. So I started investing in companies again, and we just invested in a social media company. And the first thing we did is exactly what we said.

We said, where's that? We said 10%. We said, where's the 10% we can cut? And we did it within a month, and the business has gone on unabated, and there was no damage to nothing. It's like, oh, we had subscription that we've. Thought we were using, but we realized we weren't. There's so much of this stuff that is being spent automatically that we were cut it, able to cut it, and we all went to profit immediately.

We brought cash stability to the business within a month just by cutting unexpected or unnecessary costs. 

[00:19:39] Hala Taha: How about debt?

What do we do if we have some debt that we need to pay off? How do you suggest that we handle that? 

[00:19:44] Mike Michalowicz: The only way to handle debt is by being profitable is the first thing to understand. Because when I pres present on this, people come up and say, I have debt. I can't be profitable yet. I'm like, oh. You have to be.

So just real simple definition, debt is an expense you incurred in the past that you couldn't afford or chose not to afford, but used other people's money. Only way to pay this is that you make more money than you're spending right now, profit so that you can pay this back. It's the residual leftover that you can use to pay it back, so you have to be profitable.

So step one is if you have debt, you have to implement profit first. You still allocate money toward profit. The tweak is until this debt's away, when the profit distributions come out, we use a large portion of it, sometimes upwards of 95% of that distribution to eradicate debt. I'm not a fan of having debt.

I'm a fan of self-funding. That's the position I put my companies in is that we, we have debt. We first get rid of it, and then we allow cash to accumulate in a vault account so that we have runway and we can be a bank to ourselves if we have to be.

[00:20:38] Mike Michalowicz: Really 

[00:20:39] Hala Taha: great advice. So let's talk about the two buckets or accounts that we should never touch, which is profits 

[00:20:46] Mike Michalowicz: Yeah, never really touch except for quarterly. So it's an account that sits aside. So what happens is as we allocate money to a profit, if we leave it at your active business account, it can come become very tempting day. Bills come in, you're like, I can't pay these bills. Oh, I have some profit money I'll take from there.

The day you do this, this becomes a shell game, and now you don't have profit. It's an expense and you just pretend to do it. Profit. What we're gonna do is when profit gets allocated, we're actually gonna hide that away too. Taxes, the same symptom can happen. Not only does it take from the tax money, no, no, that's for the government.

Let's hide that away. So we set that up as a separate, separate bank. Now we do touch it once a quarter, and there's a reason behind this. 

Everything I'm teaching in Profit First is a behavioral based. There's a behavioral based justification behind it. And the 90 day thing where there's an interesting phenomena around 90 days, 90 days is far enough out that.

You have to make effort to get there, but it's close enough that you can anticipate it. It is pretty imminent, so it's a good rhythm. If you took profit once a year, it's so long out people don't even think about it. But since every 90 days is just around the corner, we keep on pushing toward it like, oh my gosh, can we be more profitable?

So it builds our energy around it. This isn't just just a behavioral principle that I'm suggesting. All major public corporations do 90 day profit distributions, or the majority do. Ford every quarter sends out their profit distribution, and you'll see that with most public companies. They know the number one fiscal discipline is engagement with the shareholders.

Get shareholders excited. If you reward them every 90 days, that's the highest level of engagement. Conversely, you'd think, well, I just take out profit every week. I'll get really excited. No. Then it becomes precedent and expectation, oh, this is my new life standard. So 90 days is far enough out that we're anticipating it, but we can't get our hands on it right away, so hide that money away.

The tax, same thing every 90 days is when tax quarterlies are due. That's when the money comes out. You can make your quarterly payments. These are your personal taxes. Your business can pay your personal taxes. Again, walk with an accounting professional. Sometimes they can't pay it directly. May have to reimburse you, but there's ways to do it.

But that tax account is the same thing. We want it outta sight, outta mind. And when distribution day comes every 90 days, we do it on the calendar. That's when it comes out. And we reward ourselves with profit and we pay our tax bill through the business. 

I remember 

[00:22:51] Hala Taha: at YAP Media before we implemented Profit First, our first year in business, we were hit with like such a big tax bill that we weren't expecting and it really hurt us.

You know, like just cashflow wise, gut punch. Yeah. Now you know, taxes are around the corner. I'm like, ah, I don't work. Candle that. You know, 

[00:23:09] Mike Michalowicz: Holly, this is the craziest thing. I'm really blessed. I get an email every like 15, 20 minutes now from readers of Profit First and my other books, but Profit First, predominantly the number one busiest day of emails and I'll get one every minute or so is on tax day.

So in the US, April 15th, it's unbelievable how many people say, I just pay my taxes, my businesses pay my taxes for me. I'm so excited. I thought people would be so excited about profitability and, and they are, but never having to worry about taxes again. And that bill that can just shock you. Having your business already accounted for.

It seems to be like the biggest relief for 

[00:23:42] Hala Taha people. 

[00:23:46] Hala Taha: Like I said, I actually used Profit First in my business at Yap Media,   

it was not easy to find a bank that would allow us to have multiple checking accounts without a bunch of fees. the interfaces for these banks weren't great, and it was kind of tedious to do all the transfers.

but we really wanted to implement the profit first method because we wanted the transparency., and I'm sure a lot of my entrepreneurial listeners can relate. So I wanted to find a new bank that would allow me to create multiple accounts without a lot of extra fees that would allow me to implement profit first with ease, and that's when Mike told me about Relay.


[00:24:18] Mike Michalowicz: My favorite bank, hands down, it's called Relay.

And what's so interesting about Relay is they've become certified in Profit First. So you can go to Relay Bank it'll say, do you want set profit first account? And you click yes and it goes, it rolls 'em out. It's a no charge, no fee bank.

And it'll even do now automatic allocations. So you can say 10% to profit, 15% here, and you say Boop, and it starts doing the allocations for you. So they're a great bank. 

[00:24:41] Hala Taha: Awesome. 

All right, so the last two questions that we ask on the show is, what is one actionable thing our young and profits can do today to become more profitable tomorrow?

[00:24:52] Mike Michalowicz: Real simple. Only step one account. So we talked about the foundational five. You can do this in your personal finances or your business you choose, but call your bank and step one additional account and call it profit. Then any money that comes into your personal account or any money that comes into your business account, take 1% of it and move into this profit account.

The reason we do 1%, it's so small, is it's not gonna negatively impact your lifestyle or your business lifestyle, but it's gonna have a very positive impact on your mindset. 'cause you'll start seeing cash accumulating when you see that this can work at such a small level. It's just a matter of time before you get momentum.

And expand it out. That's 

[00:25:23] Hala Taha: great. And what is your secret to profiting in life? And this could be relationships, financial, how, however you wanna think of profiting. It's 

[00:25:32] Mike Michalowicz: funny, one of the secrets I guess is just something I discovered in the last year or so, and I've really been practicing this. I meditate every morning and I have a ritualized morning and one thing I asked myself and I have stopped asking, will I be successful in life?

I've been asking, will I matter in this life when I take my final breath in this planet? I don't know if people will say, oh, he was successful as much as Mike mattered. I think that's the more important thing that that's what people remember. So I asked myself every morning, am I gonna do something today that matters?

And that has changed my trajectory, and it actually brought more energy to being of support to my fellow humankind. Oh, I love 

[00:26:08] Hala Taha: that. That's so beautiful. Michael, it was such a pleasure to have you on your sh on the show. You are so smart. And this was one of the most actionable no fluff podcasts that I've had in a while.

So I really enjoyed it. That's my goal at Young and Profiting to be actionable. I think people are gonna be taking a book worth of notes. So thank you so much for your time. 

[00:26:26] Mike Michalowicz: This has been a joy holla as always. Thank you. Thank you. 

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