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In this segment of the course, you’ll tackle the vital task of projecting your business’s profits and losses for the first year. This crucial step is fundamental for planning your business’s future, ensuring that you have adequate startup investment to sustain operations until profitability is achieved. You’ll be working with the twelve-month profit and loss projection spreadsheet. Start by accessing the starter spreadsheet for this task, make a copy, and rename it for easy identification in your Google Drive. Before diving in, take a moment to read the notes on preparation to understand the terms used in the spreadsheet. If additional lessons are required, take the time to do so. Begin by entering your company information and specifying the start date of your fiscal year, which typically aligns with the month your business commences. This start date will automatically update the months in your table. Pay attention to formatting – make the title row, your business name, and the fiscal year visually distinct for readers. Additionally, format header rows and rows for total amounts, using paint format for efficient replication of formatting across different spreadsheet sections. Adjust the angle of dates at the top of the table for improved readability.
Proceed to list the revenue categories, reflecting different products or services your business offers, like daycare, grooming, pet supplies, and pet food for a pet care business. Add and format a row for each category, inserting the category name in the first cell. Then, estimate your first month’s sales for each category. Next, focus on the cost of sales, which encompasses the direct expenses involved in producing your goods or services, including materials, labor, and supplies. Add a row for the sales cost corresponding to each revenue category and input the estimated cost of sales for the initial month. Follow this by inserting rows for current or future operating expenses, categorizing each expense and estimating the first month’s cost. Refer to the startup expenses spreadsheet from the previous lesson or any completed expense worksheets for guidance. Additionally, estimate the monthly taxes based on your business’s legal structure, such as a sole proprietorship or LLC. Apply your first month’s estimates to the entire row by dragging the cell handle from the first-month column to the last. Initially, use a starting amount to facilitate total calculations in the subsequent lesson, knowing that these figures can be updated later if they vary month-to-month. Finally, replicate this process for each cost of sales, expenses, and taxes. Now it’s your turn to put this knowledge into practice: Format your spreadsheet, add rows for revenue, sales, and expense categories, enter first-month estimates for each, and extend these estimates across rows to complete each category.