Profit and Cash Flow Explained

What’s the difference between profit and cash flow?
Often, it’s the difference between success and bankruptcy.
Before we begin, let’s use clear language. I won’t say “income” because different people mean different things by that word. I’ll say “revenue” to mean money that comes in from selling a product or service.
Imagine two kids [...]

“How to Set Salaries” is an article that first appeared on Entrepreneur.com in May, 2006.
 
Setting salaries for your staff is always a tricky thing to do. It’s especially hard if you’ve never done it before, because you probably don’t even know where to start. On the one hand, you want to pay enough to get the best possible talent. On the other hand, you don’t want to overpay. What’s an entrepreneur to do?
 
First of all, don’t panic. Remember that your goal is to attract good talent and pay them fairly… (continued at http://www.entrepreneur.com/article/0,4621,327848,00.html)

Many great leaders have had great advisors. When you’re searching for advisors, where do you go? How do you get them? These slides from Stever’s 1999 Cyberposium presentation might shed some light.

What does it take to turn an idea into a business? Four things: a product or service, a business model, a team, and money…

Many people think a VC is someone who helps entrepreneurs start businesses. Well, they do. But that isn’t their primary job, nor their primary legal responsibility. In fact, sometimes their real job can be detrimental to the entrepreneur they fund…

Every entrepreneur I talk to dreams of attracting VC money or professional investor money. They seem to dream it because it’s simply “the way things are done.” But who set things up that way, and is it really such a good idea (for anyone other than the VCs)?

Viral marketing has become such a common buzzword it almost has the status of a real world. You can tell it’s still a buzzword, though, since it’s used largely without regard for its meaning. Here’s how to tell the difference between real viral marketing and simple PR fluff.

This article explains how to calculate the rate of return you’re giving investors. After all, they want to see a 900% return in six months, and to do a credible job of proving you’ll do it, you have to know the math…

EBITDA is an oft-touted financial measurement that’s flat out meaningless. I side with Warren Buffett in considering it an abberation of good accounting. Here’s why it makes no sense…

How much stock should each person get? When should they get it? Why should they get it? Here are some answers, some questions, and some thoughts on equity distribution in startups.

Executives, CEOs, and entrepreneurs talk about fund raising as if it were somehow a good thing. It’s not. Fund raising inherently destroys value, and should only be done in dire circumstances.

A few reflection on my experience as a judge of both the Harvard Business School and Brown University business plan competitions.

Every business needs a business model. Yet two businesses that do exactly the same thing may have very different business models, leading one to succeed, and the other to fail. What is a business model, and how do they work?

Wentworth by the Sea hotel reopened a couple of years ago. Through a combination of history, customer service, and community integration, they produced a Quite Fabulous Experience for customers and employees alike.

What’s more important: leadership or management? Both, it turns out. Management is the tool through which leadership turns into reality. And strategic planning is the process that links leadership and management.

Taking responsibility is an oft-overlooked aspect of leadership. Here’s how to start taking responsibility for yourself and your organization.

It’s not enough to enjoy the rights of leadership; to be truly effective, you must embrance the responsiblities as well.

Rigorously learning from your mistakes is one of the best ways to insure success.

Which do you need more: leadership skills or management skills? Both are necessary for a healthy company. Here’s how they’re different, and what you need for both.

Your junior programmers may be setting your strategy through their technical decisions. Learn how technical decisions can determine your strategy, with examples drawn from web site design and its impact on customer behavior.

Non-technies rarely understand the extent to which IT decisions can have profound business implications. Technical folks rarely link technology decisions with the business and strategic considerations. Here are a few hard-learned lessons from a business strategist who “gets” technology.

It isn’t enough to have the title that means “boss.” In fact, the title may even be a hindrance. When you have the identity of a leader, you can align people and build a strong organization.

What is a CEO’s job? This abbreviated summary of the original article has been replaced by the full article, available at CEOJOB1.HTM.

Ever wanted to start your own internet business? This article tells you who you need and what capabilities you need to bring on board.

Questions and Answers from a Venture Capital panel discussion. This article tells both the VC side of the story and suggests that you may not want venture capitalists as your Be-All and End-All of financing options.

Things I’ve learned about stock … the hard way (this is a paper I wrote for a friend in the late 90s)

Things to Know about Stock vs. Options.

In a leadership position, even the small stuff … isn’t. People watch your every move. Get used to it.

Stever’s monthly column, the Leadership Workshop, on Harvard Business School’s Working Knowledge website.

Archives from Stever’s Entrepreneur.com column on writing successful business plans.

The IPO is the holy grail of entrepreneurship. It’s publicized, however, precisely because it’s so darned rare. This article lays out the actual numbers on how probable it is that you’ll be the one to make it to IPO.

An overview of “Do”s and “Don’t”s in writing your business plan.

Stage 1: you have an idea. Stage 2: you’ve developed the business. Stage 3: you’re making money, it’s for real, you’re successful … so why is everything sudden chaos? This article helps you understand that Stage 3 entrepreneurship requires real changes in how you do business.

Thinking of going into business with friends and family? Think twice. It may not be the smooth ride you imagine.

As your company grows, you need to change how you think and how you spend your time if you’re to lead the company to success. Here’s how to adopt the mindset of a leader.