Net profit is bullshit. I'm measuring this instead.

If you’re anything like me, you’ve probably been taught to worship net profit. Or maybe EBITDA if you're fancy.

But in my opinion… 

Net profit is a bullshit metric.

It’s an Accountant’s idea of success, not a business owner’s.

Because right after you stare at that tidy little number at the bottom of your P&L, reality smacks you in the face:

• Asset finance repayments
• Old supplier debt
• Business loans
• Lease liabilities
• Director’s drawings

And a list of other things hiding on your balance sheet that you only see once a year (and never really understand).

The fact that you can show a profit and still have zero cash in the bank sucks.

Or worse, you can show a profit and still go broke (coming from experience).

And don’t even get me started on whether the owner takes a salary or not—because two identical businesses will show completely different “net profit” numbers based on that one decision alone.

So if we’re not bragging about topline revenue…

And net profit is just a variable made up of other variables...

What the hell should we track?

Cash, baby.

Cash at bank.

Cash left over after everything.

Cash the owner actually takes out of the business.

Not cash before loan repayments.

Not cash before your accountant “optimises". 

Actual, leftover, real, use-it-how-you-like cash.

If you're not seeing that number grow, you're not building a business. You’re building a machine that makes other people money—but not you.

So how do you actually start holding onto more cash?

It wasn't as easy as I thought to figure out.

Here are a few places I started stacking wins to fix a leaking cash problem:

1. Stop trying to grow your way out of a margin problem.

I learned that more sales don’t fix bad unit economics.

If your product margins are weak, every extra dollar you make just digs the hole deeper. Fix your COGS, pricing, or product mix first. 

Growth comes after margin.

2. Know your real breakeven—weekly.

Most founders glance at breakeven once a month and forget it.

You need to know the dollar amount you must generate every week to pay for rent, staff, suppliers, loans, and your own lifestyle. Print it and obsess over it.

3. Don’t be afraid to slow down.

Speed is sexy. I got caught up in it. But sometimes the fastest way to go broke is to chase too many things at once. I chased new products, new stores, new markets before the core business could actually fund the growth.

4. Move from P&L thinking to cash flow thinking.

Your profit & loss statement is a theory.

Your bank balance is a fact.

Forecast cash in and out at least 12 weeks ahead.

 No surprises = more cash.

5. Take your money off the table.

Too many founders play hero, working for below minimum wage, leaving cash in the business while starving themselves. You need to build your personal war chest while growing the business. Don't go overboard, but if the business can't afford both, it’s fragile.

Bottom line:

Your net profit might look great on a spreadsheet.

But the metric I’m starting to live by is: you’ve paid yourself, cleared the debt, and stacked actual dollars in the bank…

I hope this helps.