Financial Literacy
Financial Literacy for Entrepreneurs
Profit is not cash. Five distinctions that change how a small business owner reads their own numbers.
2 December 2025 · 5 min read
Many profitable businesses run short of money. The reason is almost always timing: profit is recorded when you invoice, cash arrives when you collect, and the gap between them has to be funded.
Five distinctions worth learning
Profit versus cash. Turnover versus margin. Instalment versus total cost of borrowing. Assets versus liquidity. Personal money versus business money.
Each one, understood properly, prevents a specific and very common mistake.
Where to start
A simple monthly view of money in, money out and what is committed next month is worth more than any sophisticated model that never gets updated.
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