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Which is more important? Cashflow or profit? nnWe’ll explain why getting in control of your cash is vital for the stability and continued success of your business. nn#businessadvice #SmallBusiness #profit #cashflow nnCashflow and profit are two of the most important financial metrics for any business. But while they’re both related to the financial performance of a company, they measure different things.nnKnowing the difference – and how cash and profit contribute to your success story – is a vital skill if you want your business to have the best possible financial health.nnGetting your head around the differences between cashflow and profit can be a gamechanger – especially when it comes to managing your working capital.nnSo, let’s look at the differences:nn✅Profit refers to the amount of money your business has left after subtracting all expenses from your revenue. It’s a measure of your company's financial success over a given period, whether that’s a month, quarter or a full 12-months.nn✅ Cashflow is a process that measures the inflow and outflow of cash in your business. This includes both your operating and investment activities. Maintaining a ‘positive cashflow position’ is vital for meeting your financial obligations.nnWhy is it important to make a profit?nnProfit is a measure of the financial success of your business. It’s also a key factor in your growth as an organisation. nnHealthy profits mean you have the surplus cash needed to reinvest in the business, and to pay yourself and your fellow shareholders healthy dividends.nnHowever, you can only make a profit if you have enough liquid cash to keep operating – and this is where the importance of cashflow becomes paramount.nnWhy is positive cashflow so essential?nnPoor cashflow is one of the biggest factors in most business failures. As the lifeblood of the company, cash is an essential ingredient in the financial mix. nnTo operate effectively, you need more cash inflows than cash outflows. If not, you don’t have the cash to purchase raw materials, pay your workforce or buy the services that keep you operating.nnPositive cashflow is all about ensuring that there’s more cash coming in than expenses going out. nnTalk to us about getting in control of your cashflownnProfit is an excellent measure of your financial success. But positive cashflow is the electricity that powers your business and keeps the wheels turning day in, day out.nnPositive cashflow helps you:nn✅ Stay operational, with enough cash in the kittyn✅ Meet your financial obligations as a companyn✅ Invest in your expansion, growth and scale-up strategyn✅ Sustain your long-term success as an ambitious business.nnGet in touch to talk about your cashflow position.