My old boss in Denver said 'cash flow is more important than profit' and I thought he was nuts.

Watching a solid client almost fold last quarter because they were profitable but broke proved his point instantly. Anyone else have a simple rule that seemed wrong until you saw it in action?

3 comments

3 Comments

caleb_thomas8512d ago

That "cash flow over profit" thing is real, but I've seen the opposite bite people too. A local shop chased every quick cash job, ignoring their long-term profitable contracts. They had money in the register but no real earnings, so when equipment broke, they had no safety net. Profit tells you if the model actually works long-term. You need both, but profit is the real health check.

pat_coleman12d ago

My uncle's landscaping business went under that exact way. He was always paid up front for small jobs but his three big yearly contracts were barely breaking even. What's the right balance in your view?

eric7233d ago

Exactly, it's a mix. We track cash daily but review real profit every week. Lets us spot if we're just busy or actually making money.