Is cash or profit more important for my business?

I don’t know which is more important, cash or profit, for my early stage business. I know I need to reduce stock levels and this will increase cash flow, but it will also have a negative impact on my margins. I know I need new computers, but this will increase cash outflow and the depreciation will negatively impact my earnings.

I talked with a serial entrepreneur and she said that the only reality in business is cash, that accounting and profit are an art form. She told me you need cash to pay bills and salaries and that profit and cash were not the same thing. She said not to worry about depreciation, it was a non-cash item. She said get what you really need and can afford and don’t worry about depreciation.

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