| Answer the questions that follow, and you're on your way to a set of useful financials. Creating your proforma: What are your gross sales from revenue from your products or services per month? Include all the income generated by the business and its sources. What is your cost of goods sold per month? This is the actual cost of the products, materials, or ingredients you purchase or manufacture for resale. What is your gross profit or gross revenue per month? This is the difference between your gross income and your cost of goods sold. Gross profit can be expressed in dollars, as a percentage, or both. As a percentage, the gross profit is always stated as a percentage of revenue. What are your variable expenses per month? Variable expenses are those that change based on the amount of business you do, such as advertising, sales commissions, freight, and supplies. What are your fixed expenses per month? Fixed expenses are paid at the same rate, regardless of the volume of business, such as rent, utilities, salaries, and wages. What are your total expenses per month? These include both fixed and variable expenses. What is your net profit or loss per month? This includes gross profit or gross revenue minus total expenses before taxes.
Creating your income statement: What are your total sales for each year? Do you have revenue from other types of sales? If so, add them into your income. What is your cost of goods sold for each year? What is the gross profit for each year? What are your variable expenses for each year? What are your fixed expenses for each year? What is your net income for each year?
Creating your cash flow statement: What is the beginning cash balance for the month? What are the cash receipts from sales for the month? What is the total cash available? Add the beginning cash balance to cash receipts from sales. What are the different cash disbursements for the month? This includes the monthly expenses and all accounts payable (the money you owe suppliers for inventory or manufacturing materials). What are the total cash disbursements for the month? What is the net cash from operations? Subtract the total cash disbursements from the total cash available to get the net cash from operations for the month. Carry the net cash from operations to the next month. That becomes your new beginning cash balance.
Creating your balance sheet: What are your company assets? Include all cash, receivables, inventory, prepays, and fixed assets. What are your total company assets? What are your company liabilities? These include all payables, taxes, notes, bonds, and other debts. What are your total company liabilities? What is the equity of your company? This is your total assets minus your total liabilities.
A good set of financials offers you a valuable window into the operations of your business and can be a great planning tool to reach the objectives and goals of your Yahoo! store. In the next chapter, we look at the process of finding and hiring a staff for your business, and the duties required of them to successfully run your Yahoo! store. |
