Cash Flow
Profit First
Mike Michalowicz
A simple discipline for cash flow and actually keeping profit.
Recommended for: Cash Flow Problems
The Challenge
Improve deposits, progress billing, invoicing, collections, vendor terms, payment schedules, forecasting, and reserves.
Why This Happens
- The problem has not been defined clearly enough to solve.
- Daily urgency has replaced a consistent process.
- The business is not measuring the few activities and results that matter most.
Questions to Ask Yourself
- 1.What is happening now?
- 2.How long has this been a problem?
- 3.What have you already tried?
- 4.What result do you want in the next 90 days?
- 5.What number would show improvement?
- 6.Who owns the next action?
What to Do First
1
Write down the current facts without assumptions.
2
Choose one measurable result for the next 30 days.
3
Schedule the first action and assign clear ownership.
Step-by-Step Solution
- 1
Identify the root cause instead of treating only the symptom.
- 2
Choose the smallest practical action that can create evidence.
- 3
Use the related tool or worksheet to organize the work.
- 4
Review progress every week and adjust from real results.
- 5
Share what worked so another owner can learn from it.
Three Levels of Solutions
Quick Win
Do this today
List every bill due in the next 30 days and every payment you expect.
Build the System
Next 30 days
Open separate accounts for profit, taxes, and owner pay and review cash weekly.
Long-Term Transformation
Where you're headed
Reserves that carry the business through slow months without panic.
Lessons From the Pass It On Library
From Profit First
Create separate financial buckets and review cash regularly.
Framework: Allocate first: Profit, Owner Pay, Taxes, Operating Expenses.
From Business by the Book
Be cautious with debt; build reserves.
Framework: Biblical Business Decision Check
Pass It On Action
Start a weekly 15-minute cash review this week.
Your Action Plans
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7-Day Action Plan
- Day 1 — Identify the problem: write down exactly how “Cash Flow Problems” shows up in your business.
- Day 2 — Review the numbers: gather the facts, figures, and examples connected to this challenge.
- Day 3 — Find the root cause: answer “What is happening now?”
- Day 4 — Choose one change: Write down the current facts without assumptions.
- Day 5 — Assign responsibility: name ONE owner, a deadline, and the expected result.
- Day 6 — Implement: Choose one measurable result for the next 30 days.
- Day 7 — Review what happened: what worked, what didn’t, and what you’ll do next week.
30-Day Action Plan
Week 1 — Diagnose
- Answer: What is happening now?
- Answer: How long has this been a problem?
- Answer: What have you already tried?
- Complete the 7-Day Action Plan.
Week 2 — Build
- Open separate accounts for profit, taxes, and owner pay and review cash weekly.
- Identify the root cause instead of treating only the symptom.
- Choose the smallest practical action that can create evidence.
- Use the related tool or worksheet to organize the work.
Week 3 — Implement
- Review progress every week and adjust from real results.
- Share what worked so another owner can learn from it.
- Train the people involved and assign owners.
Week 4 — Measure & Improve
- Compare results to where you started.
- Write one lesson learned.
- Adjust the process.
- Share what you learned with someone in the fellowship.
Biblical Principles
Wisdom for the journey — encouraging stewardship, integrity, and service, never a promise of guaranteed success.
#41 · Money Management
Know the financial condition of your business
Proverbs 27:23–24
#43 · Money Management
Build financial reserves
Genesis 41:34–36
#44 · Money Management
Be cautious with debt
Proverbs 22:7
Related Challenges
Recommended Books
Approved Bookshelf resources related to this challenge.
Faith & Business
Business by the Book
Larry Burkett
Biblical principles for running a business with integrity.
Recommended for: Cash Flow Problems
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Challenge → Diagnose → Prioritize → Learn → Take Action → Measure → Improve → Help Someone Else
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