How does a small business owner set aside enough money to actually make a profit?
When we receive payment from a customer we usually have a bill or payroll to apply it to. If not, there is always something on the line of credit. Invoices being paid do not always have a corresponding accounts payable (on labor only jobs) but we may have an outstanding A/P from another customer whose is late paying. We know we are profitable but without borrowing on the line of credit, we do not have cash in hand to allow the owners to take a distribution.