How I Almost Went Bankrupt and Found My Miracle: My Journey with Profit First

Introduction

Let me take you back to July 2023, a time when I was on the brink of financial disaster. This is the story of how I nearly lost it all and why I am now a passionate advocate for the Profit First method. If you're a business owner struggling to keep your head above water, my experience might just be the turning point you've been searching for.

 

The Profit First method can be a game-changer for business owners facing financial challenges.

The Hiring Gamble: From Zero to Four in Record Time

At the beginning of July 2023, my accounting practice had reached a point where I knew I needed help. I had hired people before, but none of them quite fit the bill. So, in a bold move, I decided to start fresh. I let everyone go and resolved to find one highly qualified person to join my team. I ran an ad on Indeed and was pleasantly surprised to find not just one, but two candidates who seemed to fit the criteria perfectly.

Being the risk-taker that I am, I decided to hire both of them. My logic was simple: more hands on deck meant more time for me to focus on what I do best—selling and generating new business. Around the same time, a friend of mine who I'd been trying to work with for a while became available. She reached out, and I couldn't pass up the opportunity. "Come on board," I said. And if that wasn't enough, a fraternity brother called me, asking if I could help out another brother in need of a job. Despite having just hired three new people, I thought, "Sure, why not?"

In the span of a month and a half, I went from having zero employees to four. My thought process was clear: with four capable people, I should be able to delegate most of the work, freeing me up to bring in more clients. What could go wrong?

The Harsh Reality: A Team That Wasn't What It Seemed

It didn't take long for my grand plan to unravel. I quickly discovered that my supposed dream team was far from it. Out of the four hires, only one was exceptional. Two turned out to be disastrous, and the fourth was mediocre at best. But here's the kicker—it took me months to figure this out.

These employees weren't completely awful; they did just enough to keep from getting fired. For months, I watched them scrape by, doing the bare minimum. Meanwhile, I was drowning in work, stressed to the max, and my bank account was quickly depleting.

The Breaking Point: A Choice Between Payroll and Family

The tipping point came in October 2023. My oldest son was planning his first college trip to Morehouse College for their homecoming, and as I looked at my bank accounts, I faced a gut-wrenching decision. I had enough money to either take him on this trip or make payroll—but not both.

As a father, the choice was clear. I wasn't going to miss this milestone in my son's life. But that left me with a very uncomfortable reality: I was about to be unable to pay my team. I was at a crossroads, and something had to change.

A Lifeline in the Form of a Book

While travelling to Atlanta for my son's college visit, I stumbled upon a book I had read before but hadn't fully embraced—Profit First by Mike Michalowicz. As an accountant, the first time I read it, I was put off by the idea of setting up multiple accounts and the perceived criticism of traditional accounting practices. But something about my desperate situation made me give it another shot.

 

Re-reading Profit First during a challenging time provided the clarity I needed.

As I reread the book, it hit me like a ton of bricks. The fundamental flaw that Mike talks about in traditional accounting—where profits are treated as an afterthought—was exactly what was dragging me down. Instead of hoping and praying for a profit at the end of the year, the Profit First method advocates for taking your profit first, setting aside money for taxes and owner's compensation, and forcing yourself to run your business on what's left.

Suddenly, everything became clear. I realized that I had been running my business the wrong way. I needed to implement the Profit First method immediately.

The Turnaround: A Series of Miraculous Events

As soon as I returned to Chicago, I took action. I set up the Profit First accounts and began allocating my income according to the method. I saw immediately that I could not afford to keep my entire team.

That Monday, I fired the worst performer. The second worst must have sensed what was coming because they quit the next day. Then, in what felt like a divine intervention, I was approved for a small business loan that completely alleviated my cash flow concerns. The day after that, I secured a large client engagement that allowed me to pay off the loan and stabilize my finances.

In the span of just a few days, I went from the brink of bankruptcy to financial stability. Fast forward eight months, and my business has transformed. I now have four full-time staff, no cash flow issues, and more money in my accounts than ever before.

Your Path to Miraculous Results

My story is unique, but the principles behind it are universal. The Profit First method changed my life and my business, and it can do the same for you. Here’s how you can start your journey:

1. Download the Core Chapters of Profit First.
   The first step is to get familiar with the Profit First method. Download the core chapters of the book and start reading today.
2. Schedule a Consultation.
   Understanding the method is one thing, but implementing it effectively is another. Set up a meeting with us to discuss how the Profit First method can be tailored to your specific business needs.
3. Order and Read the Full Book.
   Don't stop at the core chapters. The full book offers in-depth insights and actionable steps that will help you fully integrate Profit First into your business.
4. Implement the Profit First Method.
   This is where the magic happens. Once you start applying the Profit First principles, you’ll see a profound transformation in your business and life.

Conclusion: Embrace the Miracle

The Profit First method turned my business around, and it can do the same for you. You may not face the exact same circumstances, but when you start doing the right things, miraculous results will follow. Your business deserves it, and so do you.

 

Embrace the Profit First method and experience the miraculous turnaround in your business.