Solutions

Develop a realistic set of expenses. Look at public companies that are doing similar things, your expenses should fall within a reasonable range of theirs. If ten companies in your industry spend 15% of revenue on marketing, you will have to have a good explanation for why your marketing costs are only 5%. Additionally, in the earliest stages, your G&A expenses are likely to be higher.When you take out debt, or use the credit line, that influx of cash does not show up in the profit and loss statement. Neither does the repayment of said debt. This is true for bank loans, owner loans, and credit cards. As business picks up, and cash is used to repay this debt, you may show a solid profit on your P&L, but not have anything in the bank. Not to worry, your overall asset picture is better (but that’s on your balance sheet).