The monthly profit needed to cover the operating expenses of your small business in any single month is known as gross profit. It is calculated by subtracting the costs of items sold by the selling price. By excluding capital expenditures and other fees, gross profit gives you the bare minimum that you need to run your small business. Net profits are the difference of gross profits and all other business expenditures, plus tax. As a small business owner, you it’s important that you know what minimum monthly gross profit your business requires to stay afloat, while also establishing an attainable net profit goal for your company to aspire.
Information may be abridged and therefore incomplete. This document/information does not constitute, and should not be considered a substitute for, legal or financial advice. Each financial situation is different, the advice provided is intended to be general. Please contact your financial or legal advisors for information specific to your situation.