In this module you will learn:

• The difference between ’startup’ and ‘ongoing’ expenses and assets
• The difference between ‘expenses’ vs. ‘assets’ and how they are treated for tax purposes
• The difference between ‘profits’ vs. ‘cash’

OVERVIEW

Start-up expenses are those expenses incurred before the business is running. If expenses come after the start of the plan, they are ongoing expenses and they belong in the profit and loss table in the appropriate month.

DEFINITION

Expenses: Items or services paid for that are deductible against taxable income. Common business expenses are rent, salaries, advertising and travel.

Assets: Property that a business owns, including cash and inventory, office equipment, plant and equipment, accounts receivable, and investments.  Assets cannot be deducted from taxable income, the way expenses can.

• The Plan-As-You-Go Business Plan, 161-165, startup costs
• 3 Weeks to Startup, pages 23-26, startup costs