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by ProblemFactory
4940 days ago
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No, not at all. To put it simply, profit is cash flow over a long period. A business might have customers on a monthly plan, paying $2000 over their entire lifetime. If it costs $1000 in sales and set-up expenses to get a customer, they are profitable. But the expenses have to be paid up front, whereas the income will trickle in over a long period. This means that even profitable companies might need to take loans or raise financing if they need to pay for expenses now, but the income from those sales arrives in months or years down the line. A cash-flow positive company doesn't have the risk of running out of money while waiting for the profits to come in. |
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