Pay Yourself First

For years, I, along with many other entrepreneurs, have followed the formula of generating revenue and then once all my expenses were covered, enjoying my profit. The problem was and is that this is a broken and senseless formula. My good friend, Mike Michalowicz, has made it his mission to share another formula for entrepreneurs that involves profiting and paying yourself first. At first, this concept seems a little strange, but it makes total sense. Check out his TedEx talk about this here.

In his talk he speaks about our livelihood and income being a piece of the leftovers in our business. Kind of takes the coolness out of being an entrepreneur! I could share more and more of the concepts about what Mike talks about, but he does a better job than I do, so check out his video. You may also want to grab a copy of his new book, Profit First.

So are you waiting to pay everyone else first and then settling for the leftovers? If so, how has this formula worked out for you? What would happen if you profited and paid yourself first?