The Definitive Business Plan: The fast-track to intelligent business planning for executives and entrepreneurs, Second Edition

Chapter 9. Getting to net profit

<feature>

• Where the money goes

• Capital spending

• Capital assets that you already own

• Capital assets that you want

• Accounting for fixed assets

• Operating expenditure

• Net profit

• Other income and expenditure

• Moving on

</feature>

	“If little money does not go out, great money will not come in.”
	--Chinese proverb

This chapter looks primarily at the costs associated with operating your business. These can be divided into capital and current spending – also known as investment and consumption. The accounting treatment of each one is slightly different.

Costs are usually split into functional areas (R&D, production, marketing and sales, etc.). In accounting terms, production costs go into a manufacturing or trading account, and all ...