The EntreLeadership Podcast

Episode: 3 Questions That Could Save Your Business From Going Broke

Date: February 9, 2026
Host: Ramsey Network (Dave Ramsey)
Guest/Coach: John Felkins

Overview

This episode dives into a critical pain point for business owners: feeling financially "broke" even when revenue looks strong. Host Dave Ramsey and guest John Felkins (from the EntreLeadership team) break down how small businesses can identify and fix the real problems behind poor cash flow and lack of profit. They offer a practical, step-by-step approach to understanding and managing your business's financial health, emphasizing the importance of budgeting and clear financial discipline.

Key Discussion Points & Insights

1. Why Do Profitable-Looking Businesses Feel Broke?

[00:05–00:35]

• Many business owners feel like they "can't keep up with the cost" despite strong revenue streams.
• Nearly half of small businesses don’t make it past five years, but following solid financial strategies can change that outcome.

Memorable Quote:

"Have you ever felt like no matter how much money comes in the door, you just can't keep up with the cost of running your business? In other words, you feel broke." – Host [00:05]

2. Understanding Revenue, Profit, and Cash Flow

[00:36–02:58]

• Revenue: Total income from products or services sold.
  Example: Selling 20 lemonades at $3 each = $60 revenue.

• Profit: What remains from revenue after all expenses, including taxes and interest, are subtracted.
  Example: $60 revenue minus $15 expenses (lemons, cups, water) = $45 profit.

• Cash Flow: The movement of money into and out of the business during a set period.

  • Positive cash flow means more money in than out.
  • Negative cash flow signals more money going out than in—this is dangerous and unsustainable.

Memorable Quotes:

"Revenue is actually your income. Think of it this way. If you're running a lemonade stand and you're selling the lemonade for $3 a cup, and you sell 20 cups, well, that's making $60 of revenue." – John Felkins [00:42]

"Profit, or net profit, is the money that you have left over after you've subtracted all your expenses from your revenue, including taxes and interest payments." – John Felkins [01:16]

3. Why Are Cash Flow and Profits Low When Revenue is Good?

[02:59–03:25]

• Common reasons:

  • Overspending and uncontrolled expenses.
  • Undercharging for products or services.
  • Delays in receiving payments from customers.

• Key Underlying Cause: Lack of a real, working budget.

Memorable Quote:

"For most people struggling with cash flow and a broke business, the issue really comes down to one major underlying cause. Their business doesn't have a budget." – John Felkins [03:12]

"What they're trying to do is they're trying to outearn their stupidity. Which is why we say revenue is vanity, but profit is sanity." – John Felkins [03:22]

4. The Solution: Building a Realistic Business Budget

[03:26–05:38]

Step-by-step budget process:

1. Write Down All Revenue Streams
   • Review last month's profit & loss statement to see where money comes in.
2. List Cost of Goods Sold (COGS)
   • Direct costs (e.g., lemons and cups in the lemonade stand).
3. List All Expense Categories
   • Every business expense; nothing should be left out.
4. Fill in the Numbers
   • Use informed guesses or past statements as a guide.
5. Calculate Expected Profit or Loss
   • Revenue – Expenses – COGS = Profit or Loss.
6. Review the Budget Regularly
   • Preferably weekly; adjust course as needed.
   • Questions to ask: "Are we on target for our revenue goal? What expenses can we cut or minimize?"
7. Plan for 12–18 Months
   • Account for seasonality and non-regular income/expenses (e.g., inventory-heavy months for a fireworks stand).

• Encouragement:
  Don’t be intimidated if budgeting is new. The first attempts may not be perfect, but consistent attention to financial detail is non-negotiable for survival and growth.

Memorable Quotes:

"Revenue is vanity, but profit is sanity." – John Felkins [03:22]
"It's not okay to avoid the financial details of your business because they will make or break you." – John Felkins [05:12]
"Once you see exactly what money is coming in and what money is going out, you're going to be able to pinpoint the problems leaving you feeling broke and hopefully start moving things up and to the right." – John Felkins [05:30]

Notable Segment Timestamps

• 00:05: Introduction—The “broke” business problem
• 00:36: Simple explanations of revenue, profit, and cash flow
• 02:59: Discussion of why businesses struggle financially despite high revenue
• 03:26: Practical steps for creating a budget
• 05:12: Encouragement for first-time budgeters; importance of financial diligence

Memorable Quotes Recap

• "Revenue is vanity, but profit is sanity." – John Felkins [03:22]
• "What they're trying to do is they're trying to outearn their stupidity." – John Felkins [03:20]
• "It's not okay to avoid the financial details of your business because they will make or break you." – John Felkins [05:12]

Bonus Resources

[05:58]

• The episode ends by inviting listeners to download the free "Entree Leader’s Guide to Business Finances" for deeper learning.
• The resource promises actionable tips for building margin and scaling your business, going deeper than the episode’s framework.

Takeaway

This episode frames financial discipline as the cornerstone of business success, drilling home that understanding and budgeting for every dollar is not optional. Clarity around revenue, profit, and cash flow—plus a commitment to regular budgeting—can be the difference between surviving and thriving as a business owner.