What is cash flow?
Cash flow: Money that actually comes into the business and goes out of it, week by week or month by month.
Cash at the end of a week = cash at the start + money in - money out
Example
A small gym in a quiet summer: $4,000 comes in and $4,600 goes out each week. Its cash flow is -$600 a week, even in months that show a profit on paper.
Made-up people and numbers from the cases of our course; the math is real.
A common mistake
Taking profit for cash. Rosa earns $9,000 for a conference order in week 3, but the client pays 45 days later, while food and staff are paid at once.
Try it with your own numbers: Cash runway calculator (free, no sign-up).
Practise this in block 1
Block 1 of Ownwise is free, with no account needed to start: short lessons on costs, margin and break-even, then a made-up case where you make the decisions. This term has its own lessons in block 3, part of the paid practice pack.