This month I will like to share some basic information about financial terms that every business owner should know. My desire is to share accounting and financial tips to the aspiring entrepreneur and even the business owner that’s been in business for a little while. Maybe you are good at creating sales but poor at managing your cash. This information is for you. I will like to explain the difference between Gross profit and Net income. Many of us know the difference between gross and net based off our paychecks we received from working for someone. It is very similar in business.
If you own a business you will need to frequently project your income. You should always know how much money is coming in or when to expect revenue. Many people do not have a lot of cash flow so this is imperative for you to do. Now if you are not a big business, you most likely do not have large contracts or revenue coming in periodically. As a small business owner, there are things you can do to project your income for current products or new products of services you are looking to sell in the future.