Two shops on the same street close at the same hour. One of them can lock the shutter and lose nothing. The other must sell before dark or watch the day’s stock turn into rubbish. That single difference quietly decides how much of the profit either business gets to keep.

Some businesses keep competitors out by being better. Others keep them out by holding a piece of paper nobody else can get. That second kind is the most flattering advantage in business — and the one most worth reading carefully, because the hand that grants it can also take it back.

Some businesses make a hundred small decisions a day and learn by evening which ones were wrong. Others make one enormous decision and wait twenty years for the answer. Both can be run by honest, capable people — but they ask completely different things of you as an owner.

Almost every company sells a few things that do well and a long list of things that barely move. The surprise is that the accounts usually show the whole list making money — because of the way ordinary cost accounting spreads shared expenses. Here is how to see past that.