WTF? / Part 3 / 3.8
What is cash flow?

Cash flow

THE 30-SECOND ANSWER

Cash flow is where the cash actually went, money in and money out, in the order it happened.

In plain English

Profit and cash are different. A profitable month can leave you with no money if the profit is sitting in unsold inventory or an unpaid invoice.

Resale is cash-hungry by design: you pay for the load now and collect over the weeks it takes to sell.

Example

You made $1,700 in profit and still ended the month $6,000 lighter because you bought another load.

Why it matters

Businesses do not fail because they are unprofitable. They fail because they run out of cash while being profitable.

COMMON MISTAKEBuying a second load before the first one has converted back into cash.
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