Cashflow versus Profit. Why Does It Matter?

It’s great to be profitable. 

But if you can’t ride out negative cashflow – particularly as a subcontractor – you can be profitable and still not have a sustainable business. 

We’ve all heard the saying: 

Turnover is vanity. Profit is sanity. 

It’s neat and punchy. But we’d add this: 

Cashflow is reality. 

It’s your day-to-day, lived experience in the business. 

And even profitable businesses can be forced to cease trading if cashflow isn’t in hand. 

First step – and yes, we know we’ve been banging this drum hard – but going into 2026, we’re seeing more than ever that businesses need: 

• a careful cashflow forecast 

• controlled spending 

• and, where at all possible, cash reserves  

One thing we’re hearing a lot is how hard it is to predict when jobs will actually start – largely due to the knock-on effects of the BSR – which impacts the reliability of cashflow forecasts. 

That’s not a good reason to avoid having one. 

The first step is still your cashflow forecast. 

Without it, you’re running blind – unable to make good decisions, and far more likely to take a tumble. 

Get your forecast in hand. 
Model decisions before you make them. 
Take proper commercial responsibility for your business. 

As leaders, that responsibility sits with you. 

Our latest video is here.
Our free cashflow forecast template is here.