Great book about how to seperate accounts for you business, track where money is and where money goes and be mindful of how you use it. Tax account, Profit account, Operating Expenses account, Owners Comp, Income. Wtih current and target distributions to each and how being leaner forces you to be more innovative

Generally the goal is to make more money which means you want your business to be more profitable rather than necessariily bigger
Inconsistent cashflow can make planning and spening as an entrapenuer difficult and you can easily not allocate funds for specific things or misappropriate said funds and justify it in your head
Business should focus on things that improve profit and don't increase operating expenses, do more of what you do best, don't spread yourself thin over many many different areas you aren't as competent in, also can decrease day to day enjoyment as you find yourself doing what you think people want rather than what you want (gutter cleaner, starts adding other things like replacing wood or shingles which requires more know how and tools to buy and maintain rather than doubling down on what they do best)
You can't become efficient in a crisis
Looking at one big bank account with out sub allocations to various ideas / needs is bad and misleading with regards to what kind of cash you have for what
Look at and understand your 3 key reports, income statement, cash flow statement and balance sheet
4 core principles of profit first: use small plates (divide up into 5 accounts, owners comp, tax, income, profit and opex), serve sequentially (only pay bills from opex, if you can't afford them don't steal from other accounts, instead delete expesnses), remove temptation (make profit and taxes hard to access and in a seperate bank account), enforce a rhyth (twice a month allocate from income to various other accounts and pay bills),
When you have less you are forced to be more efficient and do more with less.
Instant assessment (pg 61) the tldr is find out where your money is going and what its like relative to business of similar revenue (see chart on pg 68)
Based on target vs actuals, add to title of vairous accounts the actual and desired goal % for each account
Changes to the tweaking of account percentages should be slow like 1% every quarter kind of slow to each of tax, profit and owners comp and -3% from operating expenses (this is beacsue its better to go slow rather than fast up and then have to back track)
Owners comp is the money you pay to the owner as a salary for day to day living expenses (what a reasonable salary would be in industry for what you find yourself doing 80% of the time). This is in contrast to profit which a combination of emergency fund and basically a quarterly bonus
Under 250k you are the only employee but under 500k you might not just be the only employee but you should still be doing 90% of the work. Don't fall into the trap of hiring to much and you as the owner slacking on the day to day. 10% of the time should be making systems to help contractors or other employees
Your taxes should be payed for by your business
Inform your CPA and book keeper about the system you're using (if they refuse ask how many of thier business client are consistently profitable)
CAP is current allocated percentage, TAP is target allocation percentage. Generally TAPs are lower the % of operating expenses, and increase everything else
Cut expenses, think do we really need this, if we determined it wouldn't help our profits by the end of the year don't buy it
For Owners comp, only take what you need to pay yourself, let the rest accumulate (determined earlier based on industry of you 80% of the time work)
Take quaterly profit distributions to all owners based on % of owning. Only take 1/2 of the profit account as the other half serves as an emergency fund
Celebrate and enjoy life with the profit
Every quarter also you should pay quarterly tax estimates
Debt freeze, stop any recuring payments, get monthly expenses down to 10% or lower by whatever means necessary
99% profit allocation to wipe debt and 1% to celebrate (still important)
Debt snowball, pay off smallest first, the next smallest (works well with human psycology)
Weight loss is hard because once the of being fat is gone people loose motivation to maintain the new lifestyle
To avoid short sighted behavior, look at 12 month rolling averages to estimate things like income, and compare this month to the same month in the prior year
Don't look at a good month and say this is my new normal
Salary raises if sustainable on the 12 month moving average and based on potential accumulation in owners comp account (take into account bad months to draw on reserves for your salary from this account)
(mainly get all expenses, mark everything with a P generates profit, R necessary but can be replaced with a less expensive alternative, U for unecessary -> cut until your target), pg 121, instructions for cutting expenses
For employees, evaluate whether their role is mandatory for operations
When doing layoffs, explain the reaons, providie support taht you can afford such as resume circulation or severance. Once each person is laid off call a staff meeting and share what you did and why. Take responsibilit for the issue and fixing it and you are now stable.
Never ask people to take a pay cut. This causes emotional awfulness and moral hits. Also everyone looses confidence in your company and the unspoken agreement that their salary won't be touched. You also have your best talent looking to jump ship soon after usually
No automatic with drawls (seems extreme), notify vendors, new card with no transfers of payment processing (tell bank), thus you know exactly whats on your new account rather than not knowing or forgetting
See if you can wait one more day for soemthing you need or want,, tis a good litmis tests
Call and ask vendors for discounts
Make the game of winning based on efficiency, frugality and innovation not size, flair, looks
Focus on one aspect of your business that best benefits your customer. Challenge yourself to figure out how to get 2 times the results for half the effort
Get rid of your weakest clients (but be nice about it), weakest clients take just as much time and resources as the best ones but are a massive drain on resources and time to help them and deal with their complaint. Its not worth it financially or time wise
Get rid of your bad clients who only want your least profitable products and services
Advanced Techniques: read but don't iimplement until at least 2 quarters of activity with basic
The Valut Account: panic 3 month reserve of expenses
Stoking: For gathering stock in advance
Pass Through: for reimbursement
Materials: Reimbursement of materials, sub contractor/commision: reimbursement of subcontractors
Emplyee Payroll: duh
Equipment: high end equipment saving
Drip: Distribute large upfront payment overtime (lets say they pay for a year all at once, you make it distribute monthly to income in the correct increments)
Petty Cash: lunches and gifts
Prepayment: to grab prepayment discounts
Sales Tax: If you collect sales tax
Document processes
Calculate target revenue amount for take home
Can you afford a new employee. For each full time emplyee your company should generate Real Revenue of $150,000 to $250,000
Lock in lifestyle: always look for free option, never buy new when you can buy used, never pay full price if possible, negotiate and seek alternatives, delay major purchases until you have written down 10 alternatives
Can teach to children too with this acounting system vs their allowance (pg 175)

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Profit First

Mike Michalowicz