Gross profit is equal to your revenue minus your cost of goods sold (or cost of sales).
Turn to Virgin founder and Chairman Richard Branson for a simple mnemonic to help you remember the difference, "Pretend you're fishing. Net is all the fish in your net at the end of the year. Gross is that plus everything that got away." This is the advice that was given to him by one of his Virgin boardmembers after he consistently made this mistake early on in his career...he considers it the best financial advice he ever received.
Effective Tax Planning for the MicroBusiness is in stores now.
Click on this link to receive 20% OFF plus FREE Shipping!