Dear Dave: I've just started my own small business. As the owner and only employee, how do I determine my profits? — Brittany
Dear Brittany: Here's a basic Accounting 101 definition for you, regardless of how many employees you have or how big your business may be. What you take in, minus expenses — in other words, your revenues minus your expenses — equal profit. Believe it or not, it really is that simple.
Since you're just starting out, I'd strongly advise you to set up a separate checking account for your business. That's the only way to accurately tell exactly what's going on within the business. When you co-mingle business money with grocery money and things like that in your personal account, you'll never have an accurate picture of what's really happening with your business.
Good luck, Brittany!
