Founders - a deer in headlights when it comes to PROFIT vs. CASH!
- Apr 1
- 2 min read
PROFIT vs. CASH
You can be profitable and still run out of CASH!
That surprises more founders than it should.
Because profit and cash are NOT the same thing.
Profit is what's left after costs are deducted from revenue.
Cash is what's actually in the bank. Right NOW!
A business can look healthy on paper.
While cash is tied up somewhere else.
In unpaid invoices.
In inventory.
In deposits.
In timing.
Because REVENUE recognised in your accounts doesn't always mean cash has arrived and cash leaving the business doesn't always match when COSTS are recorded.
Two examples founders often miss:
Deferred revenue: Cash comes in upfront BUT revenue is recognised over time. Prepayments: Cash leaves early BUT the expense hits later.
That GAP between profit and cash is where businesses quietly get into trouble.
Because RUNWAY is based on CASH, NOT profit.
So a founder can see a healthy P&L and still be weeks away from a problem.
Understanding this changes how you think about almost everything:
Growth.
Hiring.
Pricing.
Payment terms.
When to raise.
Profit tells part of the STORY. Cash tells you whether you SURVIVE!
The founders who are INVESTOR-READY know the difference.
Without FAIL.
Without being ASKED.
❓ Have you ever been caught off guard by a gap between profit and cash?
At Bird Dog, we help early-stage founders build the financial foundations to know their numbers with confidence — from THE BEGINNING.
👀 If you'd like a complimentary finance health check, connect and comment "HEALTH CHECK".
💾 Save this if you're in the early stages of building.
♻️ Share if you know a founder who needs to hear this.
Activate
PROFIT vs. CASH
You can be profitable and still run out of CASH!
That surprises more founders than it should.
Because profit and cash are NOT the same thing.
Profit is what's left after costs are deducted from revenue.
Cash is what's actually in the bank. Right NOW!
A business can look healthy on paper.
While cash is tied up somewhere else.
In unpaid invoices.
In inventory.
In deposits.
In timing.
Because REVENUE recognised in your accounts doesn't always mean cash has arrived and cash leaving the business doesn't always match when COSTS are recorded.
Two examples founders often miss:
Deferred revenue: Cash comes in upfront BUT revenue is recognised over time. Prepayments: Cash leaves early BUT the expense hits later.
That GAP between profit and cash is where businesses quietly get into trouble.
Because RUNWAY is based on CASH, NOT profit.
So a founder can see a healthy P&L and still be weeks away from a problem.
Understanding this changes how you think about almost everything:
Growth.
Hiring.
Pricing.
Payment terms.
When to raise.
Profit tells part of the STORY. Cash tells you whether you SURVIVE!
The founders who are INVESTOR-READY know the difference.
Without FAIL.
Without being ASKED.
❓ Have you ever been caught off guard by a gap between profit and cash?
At Bird Dog, we help early-stage founders build the financial foundations to know their numbers with confidence — from THE BEGINNING.
👀 If you'd like a complimentary finance health check, connect and comment "HEALTH CHECK".
💾 Save this if you're in the early stages of building.
♻️ Share if you know a founder who needs to hear this.
Comments