Small Business Accounting Information

A few years ago, my friends and I joined forces and put up a small shoe store. We rented a space in a small mall and sold shoes from a supplier. We previously sold shoes to friends and colleagues and they sold well. When we opened our store, there were a few buyers. After a year, we closed the business due to poor sales. After a couple of months we decided to try another business venture but we decided to study first how to prepare a profit and loss statement for small business to avoid making the same mistakes.

A profit and loss statement for small business is essential before starting a business. You will need this to estimate how much money you will put out or will earn. Most small businesses have to prepare their own profit and loss statement for small business after the first year of operation. A statement usually starts with the gross sales minus cost of goods sold and the net sales. You then deduct all overhead and operating expenses to get your net income.