EntreLeadership 3 Questions That Could Save Your Business From Going Broke
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Feb 9, 2026 John Falcons, a practical business coach who guides small business leaders on finances. He explains the differences between revenue, profit, and cash flow. He walks through why sales can rise while cash lags. He outlines a seven-step budgeting process and stresses regular budget review to fix cash-flow problems for good.
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Know Revenue, Profit, And Cash Flow
- Revenue, profit, and cash flow are distinct: revenue is income, profit is income minus expenses, and cash flow is money moving in minus out over time.
- Confusing these terms hides problems even when sales look healthy.
Lemonade Stand Example
- John uses a lemonade stand example to show revenue ($3×20= $60) and profit after COGS ($60−$15= $45).
- The simple example highlights how income, costs, and leftover profit relate.
Measure Cash Flow Over Time
- Track cash flow as money moving into and out over a defined period, not as just account balances or receivables.
- Aim for consistent positive cash flow to grow your business.