Accounting Tip: Calculate the Minimum Monthly Profit Needed to Run Your Business

by Greg DePersio

0 min read

The monthly profit needed to cover the operating expenses of your small business in any single month is known as gross profit. It is calculated by subtracting the costs of items sold by the selling price. By excluding capital expenditures and other fees, gross profit gives you the bare minimum that you need to run your small business. Net profits are the difference of gross profits and all other business expenditures, plus tax. As a small business owner, you it’s important that you know what minimum monthly gross profit your business requires to stay afloat, while also establishing an attainable net profit goal for your company to aspire.

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