Estimating Income and Expenses
The steps described so far set the stage for determining the profit (or loss) from operating your new business income from sales (also called revenue) can be estimated by
studying the market, and expenses (also called costs) can be calculated from past experience and other sources, such as knowledgeable people, a library, or a trade association. After all costs have been estimated, they can be totaled and subtracted from the
estimated sales income to obtain the expected net profit (or loss), as shown in the
worksheet for Dover Enterprjses* in Figure 6.5/When making your estimates, remember two key points. First, these expense and income (or loss) estimates are usually for
only the first year of operations/However if you also make an income analysis for an
expected typical year in the future as well as for the first year, the exercise can provide
valuable information for planning purposes for example, Jim Benson is a rocket entrepreneur and plans to send his customers into space. His space tourism business operates
as Benson Space Company and plans to start regular trips outside our atmosphere in
2009. Ticket for each of the six passengers are estimated at between $100,000 and
$300,000. It costs $20 million for tourists to go to the International Space Station
aboard the Russian Soyez.