Profit First by Michalowicz: my thoughts as a CPA

[gwendally]

I hang out with entreprenurial gurus. Dan Sullivan, Michael Kitces, Brooke Castillo, Kris Plachy, Amy Porterfield, Tim Ferris... I probably spend more time with them than anyone other than my co-workers and my husband. I take courses from them, interact on social media, listen to their podcasts, and learn and learn and learn. Several of them (maybe

Comments

[nervhq7]

Funny that you should post this, as I'm working my way through Profit First for Contractors by Shawn Van Dyke. Like you said, it seems like a cleaned up version of the envelope budgeting system, with a fair bit of looking at and calculating appropriate profit and expense ratios. Though I would say that the margin and markup sections are decent and something that I struggle with getting contractors to understand (as so often the small ones are trapped in the craftmanship/small business cycle of having to get work, do work and pay for expenses and chase volume instead of margin).

[gwendally]

He talks frequently about putting 20% of gross aside for taxes, but I prefer to put aside 25% gross for taxes and then give them a "tax refund" at tax time of whatever's left in their tax escrow over and above what is needed for the first quarterly. It rewards the behavior of having a tax escrow. But marginal tax rates for the self-employed can be close to 50% so I worry about saying 20% out loud in case they're too successful!