A founder hits one profitable month and tells the board they’ve turned the corner. Usually they haven’t.
A single month can be a timing quirk: a delayed hire, a pushed vendor payment, an annual prepay that landed early.
Four tests before you call it
- It survived a normal month. No deferred hiring or stretched payables propping it up.
- Gross margin held or improved. Profit bought by starving cost of goods doesn’t last.
- No single contract carried it. One large deal can hide a base that still loses money.
- Cash moved with it. Accounting profit while the bank balance drops means working capital is hiding the real story.
The rule
Two consecutive months that pass all four make a trend. One month that passes two of them is a story you’ll have to walk back later.
Tell the board the second time. The first time is a coin flip, and walking back good news costs more credibility than waiting a month.
Scorecard