1 · The four money words every founder needs (in plain terms)

Welcome to the capstone. You've learned how to find a problem, talk to customers, build an MVP, and use AI honestly. Now we make the part that scares a lot of founders simple: the money. You don't need to be a math whiz. You need four plain words and the discipline to check every number — because, as you'll see all course, AI can be confidently wrong about math.

The four words:

• Revenue — the money that comes in from selling your product or service. ("We sold 20 candles at $15 = $300 in revenue.") Revenue is not profit; it's just the top line.
• Costs (expenses) — the money that goes out to run the business: supplies, tools, fees, shipping, ads. Some are one-time (a logo), some are recurring (a $20/month tool).
• Profit — what's left after costs: Profit = Revenue − Costs. If you made $300 and spent $180, your profit is $120. Negative profit (a loss) means you spent more than you earned.
• Cash flow — the timing of money in and out. You can be "profitable on paper" and still run out of cash if you pay for supplies in March but customers don't pay you until May. The SBA puts it plainly: accounting for revenue and expenses is what "keep[s] your business running smoothly" (SBA, n.d.).

Why timing (cash flow) trips people up: profit is a score; cash is oxygen. A business that's profitable over the year can still die in a single month if the cash to pay a bill isn't there when the bill is due. Founders track both.

Trust DNA, finance edition: every number in your business is a claim. Revenue, a cost, a forecast — treat each one the way you treat anything an AI tells you: verify it. A wrong number you believed is more dangerous than one you knew you had to check.

Check yourself. In one sentence each, say the difference between revenue and profit, and why a profitable business can still run out of cash.

Sources

• U.S. Small Business Administration. (n.d.). Manage your finances — accounting for revenue and expenses; balance sheets; cash vs. accrual. https://www.sba.gov/business-guide/manage-your-business/manage-your-finances