What Walmart's prices won't tell you about your own

Walmart announced price cuts this week, and a debate broke out immediately over who deserves credit. Set the debate aside. What matters to you is simpler and more uncomfortable: when the largest retailer in the world moves prices, it signals something about where consumer tolerance actually sits right now. Shoppers are stretched. They are making choices based on what things cost, and they are noticing. If your prices have held steady while your input costs climbed, you may have absorbed more than you realize. If you have raised prices, your customers are now measuring you against a benchmark that just moved. Neither of those is a reason to panic. Both of them are reasons to look at your numbers this week, not next month.

Mike Michalowicz spent years watching businesses close with revenue on the books and no cash in the account. That is what Profit First is built on: the recognition that revenue tells you what came in, and cash tells you whether you survive. Owners who confuse the two do not usually fail dramatically. They grind forward, paying everyone else before themselves, until one slow month reveals that the margin they thought they had was never real. The principle is not complicated. What you keep is different from what you earn, and most owners do not know the gap until it becomes a crisis. Before this week is out, open your account and look at what is actually there after obligations, not what your revenue line says. Norm Brodsky spent decades making this same point in plain language, and his Street Smarts column at Inc. is worth the hour.

Learn from someone who's done it: Norm Brodsky — How to Stay Alive When Business Shrinks