Independent Business Commentary

THE PROFIT TRAP: WHY SOLVENCY MATTERS MORE THAN MARGIN One of the most common causes of small business failure is a fundamental misunderstanding of the difference between profit and cash. The misconception is simple but fatal: “If I am profitable on paper, I am safe.” This is a financial hallucination. You can be “profitable” on…

1. THE DIAGNOSIS: YOU ARE ALREADY DEAD (BUT YOU DON’T KNOW IT YET) The most dangerous phase of a business failure is not the bankruptcy filing. It is the six months preceding it, where the founder lives in a state of delusional optimism. You look at your P&L (Profit and Loss) statement. It shows a…
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