His Profits Looked Great Until the Business Went Broke

His Profits Looked Great Until the Business Went Broke | Disclaimer: This is a fictional scenario inspired by real challenges many business owners face. It is for educational purposes only and does not represent any specific MSM Advisors client or actual engagement.

On paper, Evan was crushing it.

His home-services company had grown fast, revenue was climbing every month, and the profit and loss statements showed a healthy margin. Whenever friends asked how business was going, he’d smile and say, “We’re doing great.”

But behind the scenes, something wasn’t right.

Vendors were calling. Payroll was getting harder to cover. And even though the business was “profitable,” Evan was constantly moving money around, delaying bills, and hoping next week’s sales would catch up to last week’s expenses.

Then, on a Friday afternoon, the bank notified him that his account had overdrawn again. He had payroll due Monday.

The hard truth hit him:
His profits looked great… but the business was running out of cash.

Profit Isn’t Cash, and That’s Where Many Businesses Get Stuck

Evan’s situation is far more common than most business owners realize.

Growing revenue feels good. Seeing “profit” on paper feels even better. But those numbers don’t always tell the whole story.

Even profitable businesses can collapse when:

Customer payments come in late
Expenses hit unevenly
Inventory ties up cash
Debt payments drain liquidity
Owners pull too much from the business
Vendors tighten payment terms

Profit measures performance.
Cash flow measures survival.

Evan was profitable, but his cash flow was negative. And no business can outrun that math for long.

Where MSM Advisors Would Step In

In a scenario like Evan’s, MSM Advisors would focus on uncovering the underlying cash-flow issues and helping the owner gain clarity and control. While every business situation is different, a proactive CPA would typically assist by:

1. Identifying where cash pressure is coming from

A review of receivables, payables, expenses, and timing would help reveal patterns the owner may not be seeing.

2. Building a cash-flow management structure

This often includes forecasting, cash-reserve planning, and timing strategies to create stability.

3. Aligning growth with sustainable financial practices

Growth needs to be supported by cash, not just revenue. A CPA may help evaluate pacing, capital needs, and expense alignment.

4. Clarifying owner compensation and business cash needs

Separating owner pay from operating cash helps ensure the business isn’t accidentally being drained during busy seasons.

These are the types of strategies MSM Advisors would recommend for a business facing cash-flow strain, not as a record of past work, but as an illustration of how thoughtful planning can protect a growing company.

MSM Advisors Helps You Build a Financially Healthy Business

For many business owners in Lawrenceville and across Georgia, shifting from “profitable” to “cash-healthy” is the turning point that changes everything.

MSM Advisors helps growing companies: