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If you don’t already have one, open a bank account for your business. You’ll need to make sure your business is
properly organized according to your state’s requirements. Your bank will tell you exactly what you need to do this,
and a quick search on the Internet will help you find the right forms. If this feels too complicated, then hold off for
now, until you get some help from an accountant, mentor, or coach to create your entities. But do keep separate
Financial Statements for each business now.

The Profit and Loss Statement
These top two boxes are where you fill in the answers to Questions 1 and 2 of the Gap Analysis: “What is your
monthly income?” and “What are your monthly expenditures?”
You should list your incoming cash—your revenue—in the revenue box on the left side, and your outgoing cash
— your expenditures—in the expenditure box on the right side.

Include all your income, both active and passive, and all your expenditures, including the latest accessory
you bought or the sandwich you get every day from the deli.
Be detailed. If in doubt, do not leave it out.
If your revenue or income fluctuates, use a 90-day average. If it varies wildly, use a 6-month average.
Include taxes, and the work to get them done, in the expenditure column.

If you’re having trouble separating your business and personal statements, consider that the following might be
business expenditures:
office or home office deduction
utilities, phone, and automobile deductions
entertainment
meals
insurance payments
office supplies

computer equipment
education
accounting, bookkeeping, and legal fees
gifts
staff
travel
gas
salaries, including those of family members who work in the business

Once you’ve listed all your revenue and all your expenditures, do the math and calculate the positive or negative
cash amount.

The Balance Sheet
The two bottom squares are where you answer Questions 3 and 4 of the Gap Analysis: “What assets do you have?”
and “What are your liabilities?” This will reveal two things: your net worth and your financial habits and tendencies.
Again, we’re going to separate any business financials from personal ones, so make sure you are entering the proper
assets and liabilities for this particular Financial Statement.
List your assets (the things you own and the things that have value to you) on the left in the box marked Assets.
List each of your liabilities (money owed to banks, credit card companies, individuals, etc.) separately on the right in
the box marked Liabilities. A traditional balance sheet would include equity—the amount that you own outright—