3. Operating expenses
These are the daily expenses incurred in the operation of your business. In this sample, they are divided into two categories: selling, and general and administrative expenses.
• Sales salaries
These are the salaries plus bonuses and commissions paid to your sales staff.
• Collateral and promotions
Collateral fees are expenses incurred in the creation or purchase of printed sales materials used by your sales staff in marketing and selling your product. Promotion fees include any product samples and giveaways used to promote or sell your product.
These represent all costs involved in creating and placing print or multi-media advertising.
• Other sales costs
These include any other costs associated with selling your product. They may include travel, client meals, sales meetings, equipment rental for presentations, copying, or miscellaneous printing costs.
• Office salaries
These are the salaries of full- and part-time office personnel.
These are the fees incurred to rent or lease office or industrial space.
These include costs for heating, air conditioning, electricity, phone equipment rental, and phone usage used in connection with your business.
Depreciation is an annual expense that takes into account the loss in value of equipment used in your business. Examples of equipment that may be subject to depreciation includes copiers, computers, printers, and fax machines.
• Other overhead costs
Expense items that do not fall into other categories or cannot be clearly associated with a particular product or function are considered to be other overhead costs. These types of expenses may include insurance, office supplies, or cleaning services.
4. Total expenses
This is a tabulation of all expenses incurred in running your business, exclusive of taxes or interest expense on interest income, if any.
5. Net income before taxes
This number represents the amount of income earned by a business prior to paying income taxes. This figure is arrived at by subtracting total operating expenses from gross profit.
This is the amount of income taxes you owe to the federal government and, if applicable, state and local government taxes.
This is the amount of money the business has earned after paying income taxes.