The profit and loss statement is also known as an income statement. Your profit and loss statement shows your projected revenue minus cost of goods sold minus expenses to determine if you have a net income or a net loss. This is often done month-by-month or for the entire year. First, you will want to work on your business’ revenue; how much money in sales do you expect to make? You will need to determine if you have multiple revenue streams. For example, if you are a restaurant, your revenue streams may be food sales, catering, and merchandise sales. To project your revenue, you want to keep it as simple as possible. After you have calculated and projected your revenue, you will then work on cost of goods sold. The cost of goods is the direct cost related to the production of your product or service. Most of the time, the cost of goods sold can be calculated on a percentage of the revenue stream. For example, in a restaurant, food costs can be estimated as about 30% of your revenue stream. Next, you will want to estimate your expenses; this is going to be your overhead costs (rent, labor, credit card fees). Once you have done all of this work, your profit and loss will be able to show you if you have a projected income or net loss.