The Golden Rule: Keep Business and Personal Money SEPARATE
- Open a separate bank account for business (even savings account)
- Never mix personal and business expenses
- Pay yourself a “salary” from business profits
Key Financial Terms:
Revenue/Income — Money coming IN from sales
Expenses/Costs — Money going OUT for business
Gross Profit = Revenue – Direct Costs (materials, etc.)
Net Profit = Gross Profit – All Expenses (rent, phone, etc.)
Cash Flow = Money available RIGHT NOW in your business
Break-even Point = When your income = your expenses (zero profit but zero loss)
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