Turnover, Gross and Net

I'm constantly amazed at how often, apparently sensible, people get these three things confused. I was asked recently what happened to the large profits our biz makes. This person had looked at our turnover and decided that pretty much all of it was spare cash to blow on fast cars and designer clothing. Their question seems to contain the hint that they felt someone with such wealth should dress a little better. On another occasion it became apparent that someone we work with on a profit share arrangement, thought that after his 15% had been paid to him we got to spend the remaining 85% on luxury items. So for the record here's what happens in our biz.

We make about 20% gross profit before expenses. When we've taken off all the running costs we're left with around 8% of our total turnover. From this 8%, we pay 15% of it to the guy on profit share and put aside 22% from what's left for corporation tax. Then we look at what we think the cash flow needs of the biz will be over the coming period and put that aside and finally we see what we think we should put away for a rainy day into reserves. If there's anything left over we might pay ourselves a dividend but often don't for fear that something will happen we haven't thought about. I'm happy to put numbers into this if any one's interested but I hope the point is made. What's interesting is how often I seem to end up explaining this to people. Is it really only people who run their own businesses who really get it?