The income statement (sometimes call Profit and Loss) covers a period of time, usually one year. Your income statement should document everything you’ve earned and spent in the year, with a goal of showing your net income. This can be the starting point for your taxes, which can make your life a whole lot easier if you’ve done it well. It also gives you a sense of how well business is going. Are you earning more than you spent? Are you heavily investing? Did you earn enough to support hiring a team member to help you with some tasks? Is each income stream performing like you’d expect? A well-made income statement can help you answer all of those questions. Luckily, it’s not that complex to make an income statement!

While you want to have an annual document to help with taxes it can also help you to make an income statement for each month. It might help you spot trends that will help your business in the future. For instance, do you get more viewers and subs during winter and summer school holidays? It could be that you’re getting more students and you might be served to stream more during that time. Is the spring slow for you for some reason? If you can’t identify a good reason for it you might consider that as a period to take some time off to unwind. Spotting important trends can really jumpstart your business.

Income

Here you enter everything that earned you income in the year. You should consider common sources like subs, tips, ad revenue, anything from YouTube videos and less common sources like merchandise, consulting work, other outside work you did, affiliate programs, and sponsorships. If you received money as a streamer it’s income for your small business, so don’t forget to count it.

Ultimately, you want a picture of all of your income in one place but I find it helpful to break it out by source. I want to know what parts of my business are producing the most income as well as if there are any good or bad surprises. Similarly, I want to compare this month to last month and this year to last year to get a sense of my growth. Knowing those kinds of things, as well as how much time you’re streaming, can help you make the jump to full time if you’re unsure or can help you secure a small loan if you need one to get something that will really help the business.

Expenses

Your expenses are what you’ve spent on the business. While of course you should make an effort to keep your expenses at a minimum, there are some benefits. As we’ve said time and again your expenses come out of your business income before you pay taxes!

So what is a business expense? There are the things you’d expect in any business like credit card processing fees, equipment, website design, and wages/fees for anyone who helped you. However as a streamer you also get to write of some things that you probably would have spent on anyways. First, you can expense a portion of your home office and your internet/electricity bills. Next, you can expense a portion of costs to go to video game/streaming related conferences. Finally, you can write off games that you buy and stream!

As with income, you should break out your expenses by type to make sure that you have a good picture of your business. Are you spending more in one place than expected? Maybe there’s a similar but less expensive vendor. Are you spending a lot more than last month? Hopefully it’s for investment.

Tools

Excel has some decent income statement templates. Their templates do go into more depth than you may need as a smaller streamer but it’s a good start. Otherwise, you can use software that we’ve mentioned before for your accounting like Freshbooks, Xero, or Quickbooks Online. If you do a good job in those programs they should be able to produce useful reports for you. You can also make up your own but I wouldn’t recommend that as someone starting out!

Conclusion

Putting together a well-made income statement will give you some important insights on your business and make your life a whole hell of a lot easier come tax time. Spending even a little bit of time analyzing your income statement will help you make better decisions and be more successful in the long run. Don’t neglect making an income statement just because you haven’t done it before! If you have any questions or need someone to double check what you’ve done, shoot me and email or leave a comment.