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Finances
Profit and Loss
One you have taken several passes at expenses and how you make money you can look at creating a simple financial statement called a P&L (Profit and Loss statement). These can get quite complicated showing the evolution of your business across many periods of time. However, to begin, keep it simple. Ultimately you've got revenue coming in and you've got money going out during a given period of time (a month for instance). The difference between the revenue in and expenses out indicates whether you are profitable or if you have losses. Losing money isn't the idea, but startups often run at a deficit for several years. Don't panic if you see some negatives early on.A simple approach is to open a spreadsheet. List all your costs and expenses. List out all sources of revenue from your sales, grants, loans, investment, interest income etc. Total all expenses. Total all revenue sources. Subtract the two totals. You can update your P&L weekly, monthly, quarterly and yearly. Once you get more sophisticated you'll start using tools to keep your P&L current. You'll also use other financial statements to understand the health of your business.Once you've spent some time with your P&L have it reviewed by someone who has more experience and you can further refine it.
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Do First
You should complete the following tasks before proceeding to the current one.
Personal Budget Review
Several months ago you created a budget to track expenses and income. Initially your expenses and income are blended with your business because the business isn't a full fledged entity yet or it's simply a pass through to your personal income. This card asks you to revisit all your expenses and start to list out any current or future expenses directly related to the business. Keep track of those in a spreadsheet. Keep receipts in a digital file. These may be tax deductible but also help you understand the costs of the business outside of your personal costs and expenses. You don't need to purchase a fancy system to track. At this stage a simple log will do.
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Small Business Marketing 101: Using Email, Social, Video and More
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Don't stop now! Just pick the very next stage-card that resonates with your business and continue working on the correspondent tasks.
