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Sample Profit And Loss Statement

The difficult process of starting a business involves a great deal of planning and decision-making; as entrepreneurs must learn to be "jacks-of-all-trades" to some degree. You must choose a business name, a legal structure for your business, create a business plan, raise capital, and make sure you have all of your permits in order.

All of these tasks require time and research. In order to start a business, though, you will need to know exactly how much funding you'll need. Of course, this will vary quite a bit depending on the type of business you choose to start, but usually most business owners will need some financial help at some point during the life of the business.

The following form contains information generally tracked in a profit and loss statement.

Income

Total net sales $__________

Costs of sales $__________

Gross profit $__________

Expenses

Fixed Expenses

Rent $__________

Utilities $__________

Equipment leases $__________

Depreciation $__________

Insurance $__________

License/permits $__________

Loan payments $__________

Miscellaneous $__________

Total Fixed Expenses $__________

Controllable Expenses

Salaries/wages $__________

Payroll expenses $__________

Supplies $__________

Advertising $__________

Dues/subscriptions/fees $__________

Legal and accounting $__________

Repairs/maintenance $__________

Total Controllable Expenses $__________

Total Expenses $__________

Net profit (Loss) $__________

Before taxes $__________

Taxes $__________

Net Profit (Loss) After Taxes $__________

Please remember that this form is only meant to be a sample. Your business may have different or additional information that should be included in your profit and loss statement. If you would like other general information or resources about starting and running a small business, please visit FindLaw's section on Small Business Law.

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Using the Profit and Loss Statement for Fundraising Efforts

It is common for a new business to need financing for various start-up costs. Sometimes, however, a business may need financing even after it has been in operation for a year or more; in fact, it may be a necessary step for growth into new or larger markets after achieving some success. When you are seeking financing for your small business, it is a good idea to provide your potential lender with financial statements for your business. Your financial statements can include bank accounts, tax returns, and your profit and loss statement. The financial information you provide will help the lender evaluate your loan application.

Financing Options for Small Businesses

Whether you need financing while starting your business or after the business has been in operation, there are various financing options for small businesses. Small business owners can ask for loans from friends or family members, contribute their own personal funds, finance their business with credit cards, or apply for loans from a bank or other financial institution.

The Small Business Administration (SBA) also offers various loan programs, each with its own eligibility requirements. For example, the SBA offers the 7(a) Loan Program, which is its most common program. No matter where you seek financing, a profit and loss statement can be helpful in successfully acquiring financing for your business.

You can find more information and resources related to this topic in FindLaw's Business Finances section, including Equity Investors and Your Business and Applying for a Loan: Dos and Don'ts.

Get Legal Help Understanding Profit and Loss Statements

Generally speaking, creating a profit and loss statement does not require the assistance of an attorney. However, if you have any questions or concerns about your profit and loss statement, or any other aspect of your business, you may want to contact a local business lawyer for guidance.

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