Example of profit calculations in a business plan

Lesson Details:

Video Transcription: Now I'm going to show you a practical example of my business plan for mobile app for the profitability section and as we talked in the theoretical lecture there's gross profit operating profit and then profit okay you know how to calculate them and basically I'm just using my fictitious numbers here so it's you know the actual numbers themselves don't really matter right so out of the 25,000 I have 23,000 and gross profit because I almost have no cost the only cost I subtracted was really the $2,000 for design a year and then for operating profit I have to subtract like taxes accounting all that stuff so I'm left with 65,000 of pure profit right that I can take home for the business now the challenge is okay net profit right like how much do I pay myself if I pay myself less then the business has more profit right and since I'm the only employee it's pretty much arbitrary because in the the whole thing is pretty profitable right so it's sixty five thousand really but it just depends how much you want to put in your bank account or how much you want to put in your reinvest back into your business maybe having a business bank account okay and those are really the that's really these three terms now in your business these may be more complex there may be more costs and so these numbers might be a little harder to get to but it's still not that hard because all you do is take your profit and subtract the right amounts of things and you get these numbers so really just arithmetic like in fourth grade really simple.