Profit and Loss
On this page you can see the Profit and Loss sheet for your business plan.
Once you've added some sales forecasts and costs you can see product performance indicators in the table further down the page.
There are two types of financials on your plan:
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Things that increase in line with the number of units that you sell.
Raw materials that go into making/ providing your products for example, or the
income you get from selling your products. These are edited on a per-product-line basis -
select the product from the table towards the bottom of the page (or add some product lines using the button above the table if you don't have any). Income and costs from your products drive your Gross Profit.
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Then come Overheads ("Fixed Costs") and depreciation. These are things that are fixed,
irrespective of how many units you sell. For example, your website hosting or the cost
of your premises. These costs apply at a plan level. Switch to these parts of your plan using the tabs (you're current on the Dashboard tab). These costs are deducted from your Gross Profit to give you
a Total Profit figure. Negative profit numbers are bad - but check
the Cashflow Forecast (from the menu down the left) to see when you'll need to put additional
money into your business to keep it afloat, and when it will start to run a cash surplus.
Cashflow
There's a good reason why they say "Cash is King" for businesses. Even highly
profitable businesses can go-under because of cashflow issues. If the line
on the cashflow summary graph goes below zero at any point it means you will need to put money into
the business for it to survive.
It's common to pay for supplies or overheads before your customers pay
you (in fact it's the most common scenario). The cashflow graphs lay
this out for you - showing not only where your money is going (the detail graph), but
also providing a cumulative view (the summary graph) so that you can see how long it will be before the
business stops needing you to put money in and starts to return more cash than it's consuming.
Cashflow is different to Profit and Loss - although the two are connected. Each provides
a different view or perspective on your businesses, and neither is enough on its own.
