Most businesses are growing by accident if at all. They are usually flying blind. Sure they look at the big picture numbers like revenue and profit. It might look good, yet when we look under the hood it is often a very different story. The business is being hollowed out and gasping for air. Why?
There’s a saying: ‘Revenue is vanity, profit is sanity and cash-flow is king’. A lot of attention goes to revenue and not enough attention is paid to the real top-line of a business – gross profit. Profitability and cash-flow are critical to survival and growth.
A lot of attention goes to the profit and loss statement. A professional investor looks at your balance sheet and cash statement first for good reason. It reveals whether you are really growing. Profitability and cash-flow are twins. You can be profitable and still grow broke.