Your profit and loss statement (also referred to as an income statement) lists your revenues and expenses, and tells you the profit or loss of your business for a given period of time. It is helpful for planning and to help control operations expenses. List monthly projections for the first year and include the following information:
- Sales Projections - Include the number of units sold, the retail price, the net price and the gross revenue.
- Cost of Goods - Include your cost for manufacturing a single unit including labor and all other indirect costs such as shipping, packaging, etc.
- Controllable Expenses - This includes salaries and payroll expenses (benefits, etc.), legal and accounting expenses, advertising and marketing expenses, auto expenses, office supplies, utilities, repair and maintenance, and other outside services. Anything that fluctuates in cost from month to month.
- Fixed Expenses - These include office rent, depreciation (amortization of capital assets), loan payments, insurance, licenses and permits, and other fixed monthly expenses.
Once you have these items listed, subtract your total expenses from your gross profit to get your Net Profit (or Loss) before taxes.
Enter your tax information and be sure you include all taxes such as sales tax, excise tax, property tax, etc. To arrive at your Net Profit (or loss) after taxes, take the total tax figure and subtract it from your Net Profit (or Loss) before taxes. (See sample Profit and Loss Statement.)