Profit versus Cash Flow: What’s the Difference—and Who Cares?
Many participants in the workshops my firm leads are surprised to learn that instant profits and rapid growth aren’t always cause for celebration. I tell them the story of how the Wonder Widget Company got started.
As a start-up, Wonder Widget was launched with $100,000 in cash and the hottest product in its market, the amazing Wonder Widget. The owners had sales and profits from the first month they had a product to sell! All they had to do was make the product and ship it to waiting customers who would pay enough to give Wonder Widget handsome margins from Day 1. And so the owners ...
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