Ever had that bewildering feeling where your business bank account boasts numbers, but your pockets feel light? It’s a common conundrum many business owners face!
The crux? It’s all about understanding the difference between revenue (what your business earns) and profit (what you actually get to take home).
So many business owners I meet confuse cash flow with profit.
Revenue is the total money coming in – it’s the cash flowing. From this, you need to deduct your expenses – and sometimes, these can be sneaky and add up faster than you think!
Profit, on the other hand, is what remains after all those deductions. It gives you the true pulse of your financial health and future growth potential.
So, even if your account looks healthy, keeping a hawk eye on your expenses is essential to ensure you’re not just making money but also retaining it.
Even better, creating and managing your business financials using a budget that projects revenue, expenses, and profit is essential.
Ready to dive deeper into the world of financial literacy and truly understand your money matters?
Inside the HerBusiness Network, we prioritise understanding our numbers to know if the time and effort we put into our business is giving us a good return (that’s another financial term you want to keep in mind – ROI – return on investment).
Access our library of Money resources inside the HerBusinessNetwork.
Here’s to doing what you love,
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