How to Make a Financial Statement For Small Business​: With Examples

Let me tell you about my good friend and customer-turned-sister, Mrs. Titi. She’s that Lagos big babe running a fashion business on Instagram and WhatsApp. You know the type: always posting fine two-piece sets, lace bubu, and custom-made kaftans with captions like “Slay on a budget, darling.”

But behind the scenes? It was a different story.

At the end of every month, Titi becomes a philosopher. She’s asking questions like:

“Where is my money going?”
“Am I even making a profit or just rotating money?”
“I don’t even know if I made made any profits this year at all”

You see, Titi sells both online and at her shop in Yaba. She collects money via transfer, POS, and sometimes through small chops and vibes (“Just remove the money from the next order, abeg”). 

And like many small business owners I know, she’s trying to run her business without solid financial records. She’s tried fancy apps, but they either confuse her or don’t match her business flow.

Sound familiar?

If you’ve ever looked at your bank alert and thought, “Wait, I made ₦500k this month, so why do I have ₦23.50 in my account?”—then this article is your rescue mission.

Let me break it down for you—real talk, no accounting jargon overload—how to make a financial statement for small business, in a way you’ll actually understand and apply. 

You ready? Let’s go.

Why Small Businesses Need Financial Statements

First things first—let’s settle this:

Why should you, a small business owner hustling day and night, even bother with financial statements?

Simple: You can’t grow what you can’t measure.

Without a financial statement, you’re basically running your business with vibes, screenshots and inshallah. 

And while “vibes” might help you trend online, they won’t help you know whether your business is actually profitable or just busy for nothing. While screenshots might help you sell, they wouldn’t help you tell how much expenses you’re making.

Remember Mrs. Titi? She was sewing and selling outfits nonstop, yet she couldn’t say with confidence if she was making gain. Her money came in anyhow, went out anyhow, and at the end of the day—she uses guesswork to calculate profits or loss.

But when you have a simple financial statement, you can:

• Track income vs expenses
  
• Know your profit or loss
  
• Make smart pricing decisions (because “everybody is charging ₦15k” is not strategy)
  
• Prepare for funding or loans
  
• Pay yourself like a boss

Truth is, whether you’re a caterer, a shoemaker, a boutique owner, or even a social media manager—you need to know your numbers.

And no, you don’t need to become a chartered accountant overnight. Just a little structure and the right tools can change everything.

In the next section, I’ll show you step-by-step how to create your own small business financial statement. 

Steps on Preparing an Effective Statement for Small Businesses

So now you know why your business needs financial statements, let’s break down how to make a financial statement for small business in 5 clear steps.

I’ll also use our dear Mrs. Titi to explain each step, but please note—Titi’s examples are not real-life stories, just stories to help you get the picture. 

Cool? Let’s start.

Step 1: Gather All Your Financial Records

Before you start putting anything into a statement, you need to gather every money-related record:

• Sales
• Expenses
• Bank statements
• Transfer screenshots
• Receipts (even the ones crumpled in your handbag)

In Titi’s case, as a fashionpreneur, she will have to go through her POS machine summary, WhatsApp chats where customers sent transfers, and that small jotter she uses at her shop to track who bought what. 

She will also check her app to download her monthly statement, check receipts of payments she got from her suppliers, even for fuel she bought throughout the month to power her shop and data she uses for marketing and selling online. 

She will account for every money move the business makes, even bank charges, credits extended to customers or debt owned to suppliers. 

Everything!

I know it’s a pain, but this is what responsible accounting looks like. If you don’t gather all your income and expense records down to the last kobo, your financial statement will not be accurate. You’ll have suya without the meat. 

So take your time and keep accurate records of all your money moves everyday so you can easily gather them daily, weekly and by month’s end. 

DO NOT rush this step!

Step 2: List All Your Income (Money In)

When you have gathered all your money sources, then proceed to record every way your business made money that month. Be specific. Where do you sell or collect money from customers?

• Online sales (IG and WhatsApp)
• In-store purchases
• Custom orders
• Delivery charges collected
• Side gigs or bulk orders

You name it. Track and record every income made. 

The easiest way to do this gigantic task is having a ledger, a book or an app where you record daily sales and other income you make on daily bases. This is a common practice! You’ve seen these “sales books” in people’s stores or even use one yourself.

But take it a step further. Instead of just recording sales, record every other money your business makes daily (side gigs, interests from saving your business capital, etc.). Calculate every income at the end of each day so it will be easier to calculate a 30-day (1 month’s) total and take that into your financial statement.

Let’s bring back our fashionpreneur into the picture! 

For example, let’s say today is DD/MM/YYYY and Mrs. Titi’s sales and incomes are as follows:

Date	Items	Oty	Unit Price (₦)	Online Sales (₦)	Shop Sales  (₦)	Other Income (₦)
dd/mm/yy	Red buba	3pcs	10,000	—	30,000	—
	Ify kaftan	1pc	7,500	7,500	—	—
	2-piece lace	2pc	15,000	30,000	—	—
	Ankara shorts	1pc	18,000	18,000	—	—
	Gain from delivery charges	—	3,500	—	—	2,500
	Interest from biz savings (Opay)	—	950	—	—	950

Let’s assume she’s been keeping an accurate record of her sales and other incomes everyday for the month of April. At the end of the month, her total income statement might look like this:

April 2025	April’s Income Statement	Totals (₦)
	Online (IG/WhatsApp) sales	345,000
	Offline (Shop) sales	285,000
	Other income made	46,500
	TOTAL SALES (INCOME)	₦676,500

Not bad, right? See how clean the numbers appear? Now, let’s move to the expense record.

Step 3: Record All Your Expenses (Money Out)

Just like we did for sales/income, list out everything you spent to keep the business running daily. These include things like:

• Raw material purchases
• Delivery cost to your shop
• Wages/salaries to your workers
• T&E expenses (this accounts for those generous goodies you occasionally bought for your workers, goodies or outings you gave yourself or your customers on the business account, etc.)
• Advertising costs (all those promo ads you ran on IG or printing flyers!)
• Sales cost or cost of goods sold (this could be the FREE deliveries you offered customers and had to cover yourself just to ensure sales happened)
• Data subscription (yes, IG will not post itself!)
• Other subscriptions (for apps you use to run your business or for the GOtv in your shop!)
• Fuel or transport costs
• Rent (if you pay yearly, divide the figure by 12 to see how much your rent costs monthly)
• Packaging
• Bank/POS withdrawal charges
• Miscellaneous
• And many more

It’s important to note that expense items are usually a lot more than income items depending on what you do and the size of your business operations. So you’ve got to pay very close attention and be meticulous with your daily recording to ensure you capture every expense made!

A lot can fall through the cracks if you’re not attentive, especially if employees have petty cash to pay for minor expenses. 

Again the easiest way to do this is by having a book or app for recording expenses immediately they are made. You can do this yourself or assign this task to an admin staff.

Back to our “Slay Queen” coroner, Mrs. Titi; in April, Let’s assume she’ve been recording her daily expenses throughout the month and arrived at these figures at the end of the month:

• ₦130,000 on raw materials (fabrics)
• ₦70,000 on labors
• ₦30,000 on delivery fees
• ₦18,000 on data
• ₦35,000 on Instagram ad costs
• ₦40,000 on shop rent (pro-rated)
• ₦19,480 on fuel
• ₦5,000 on packaging
• ₦7,200 on Mischellenous 
• ₦550 on total bank charges

Total Expenses = ₦355,230

Now, you’re ready for step four.

Step 4: Calculate Your Profit or Loss

When you have your total income and total expenses for the month ready, subtract total expenses from total income to determine if you made a profit or a loss that month.

In Titi’s example, it’s already clear that she made a profit given that income exceeded expenses, but to put that in figure, we’ll say@ Titi’s example is already clear

Total Income – Total Expenses = Profit/Loss

₦676,500 (income) – ₦355,230 (expenses) = ₦321,270 PROFIT

So, Titi can confidently say: “Omo, April sweet o. I made over 300k profit!”

Not guesswork. Not vibes. Cold hard cash numbers.

But it doesn’t stop here.

Step 5: Create a Simple Statement Format

Now that you have all your financial records, prepare a simple financial statement with them every month in a clean table. You can use Excel, Google Sheets, or even a pen-and-paper method.

Here’s a simple format:

Description	Amount (₦)
Total Income	676,500
Total Expenses	355,230
Profit/Loss	321,270 (Profit)

BOOM! That’s your basic financial statement.

It can also look like the photo below if you want to make use of a template.

💡 Pro Tip: Save each month’s statement separately, so you can compare growth and plan better.

That’s it—nothing too complicated. You don’t need an accounting degree or an MBA from Harvard. Just intentional record-keeping and a bit of math.

Now, let’s discuss the key metrics you should always track in your financial statement, so you’re not just crunching numbers for fun, but actually making smarter money moves.

The Most Important Metrics to Know from a Financial Statement

Okay, so you’ve pulled your receipts, crunched the numbers, and created your first financial statement. 

Well done!

But hold on—

Don’t just stop there and shout “I made profit!.” Your financial statement is like Google Maps for your business—it only works if you know what the signs mean.

Let me break down the most important numbers you need to understand and monitor like your business life depends on it—because, honestly, it kinda does.

Again, I’ll use Mrs. Titi’s fictional story to illustrate. But remember, these are just examples to help you learn faster.

1. Revenue (aka Total Sales)

This is the total money your business brought in before any deductions. It’s your “Money in” figure.

💡Titi’s Example:
Her April revenue was ₦676,500. This includes everything she sold, plus other incomes she made.

Why It Matters: Revenue shows how well your products or services are performing. If it’s not growing, something needs tweaking, maybe your marketing, pricing, or customer service.

2. Expenses

This is all the money you spent to keep the business running. If revenue is the food, expenses are the chop money.

💡 Titi’s Example:
Her expenses in April were ₦355,230.

Why It Matters: Expenses reveal if you’re overspending or spending smart. If you’re making ₦500k but spending ₦480k, you’re definitely not running a healthy business.

3. Net Profit or Net Loss

This is the difference between your revenue and expenses. It tells you in plain terms if you made money or just worked hard for nothing. Profit = Revenue – Expenses

💡 Titi’s Example:
When you deduct Titi’s expenses from her revenue, she made a healthy profit of ₦321,270. She’s literally entitled to dance zanku after seeing that one. If her expenses were higher, she would have made a loss.

👉 Why It Matters: Net profits can be reinvested in your business, save, or used to pay yourself.

4. Gross Profit Margin

This one sounds fancy. It simply shows how profitable your sales are before deducting operating costs. You calculate this by first finding your gross profit:

Gross Profit = Revenue – Cost of Goods Sold (COGS)

Then, using the gross profit, you find the gross profit margin:

(Gross Profit ÷ Revenue) × 100 = Gross Margin 

💡 Titi’s Example:
In Titi’s case, her total cost of goods sold (raw materials + delivery fee and everything that went in to make the sales happen) totaled ₦160,000. Her total income was ₦676,500. 

With these, we can find her gross profit;

₦676,500 – ₦160,000 = ₦516,500 (gross profit)

Her gross profit margin will then be:

(₦516,500 /  ) x 100 = 0.763 (or 76.3% margin)

Why It Matters: The higher the margin, the better. It shows how well you’re pricing your products and managing production costs.

5. Expense Ratio

This tells you how much of your revenue is going straight into costs. If this number is too high, it means you’re spending almost all your income! That’s not sustainable. You find your expense ratio by dividing expenses for the month by the total revenue multiplied by 100.

Expense Ratio = (Expenses ÷ Revenue) × 100

💡 Titi’s Example:
Titi will find hers by doing: ₦355,230 / ₦676,500 = 0.525 (or 52.5%)

52.5% is definitely a high expense ratio. If Titi was reading this, we would have advised her to go through her expenses and see if there are places where she can reduce costs a little or review her pricing so she can charge a bit higher while keeping expenses the same.

So you go do the same in your business and see if you’re spending too much or not.

6. Cash Flow

This one is vibes and reality check combined. Cash flow means how much actual cash moved in and out of your business account. It’s different from profit, because not all sales bring cash immediately (hello, customers that still owe you).

Imagine if you sold ₦500,000 worth of goods this month, but only received ₦350,000 in cash or bank transfers while the rest are in credits and pledges—your total sales is ₦500k, but your cashflow is ₦350k. Simple as that.

Why It Matters: If cash isn’t flowing, bills can’t be paid, even if you’re technically profitable.

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Knowing these key metrics makes your financial statement a weapon, not just a worksheet. When you understand them, you can:

• Stop overspending
• Price with purpose
• Plan for growth
• Prepare for loans or funding
• Actually pay yourself without fear

Next up, I’ll show you how you can make all this easier—especially if you’re not a spreadsheet person like Mrs. Titi. Let’s talk about our secret weapon: a financial journal designed just for small business owners like you.

Why You Need a Financial Journal to Track Daily Income and Expenses

Let me be real with you: creating a financial statement once a month is great, but if you’re not tracking your money every single day, you’re basically pouring water into a basket.

That’s the mistake Mrs. Titi made for the longest time. She’d sit down at the end of the month trying to recall 30 days of expenses and sales from memory. Can you imagine? Asking herself things like:

“Did that customer pay ₦22k or ₦25k for that aso-oke?”
“How many yards of lace did I restock sef?”
“Wait… I paid for generator fuel like three times abi four?”

And like clockwork, the figures never added up.

That’s why daily tracking is the game changer.

You see, daily records are like breadcrumbs. They help you trace every step your money took so you don’t get lost in the bush of confusion by month-end.

The big question is:

But wait—how do you track daily without stress?

Here’s where I introduce you to your new business bestie: The MyCEO Tribe Financial Management Journal.

This physical book is designed specifically for small business owners in Nigeria like you (and Titi). No complicated apps. No 4-hour YouTube tutorials. Just a pen, your business brain, and a simple book that helps you stay on top of your hustle.

So what’s inside this magic journal?

Inside this journal you’ll find a variety of worksheets to help you track your budget, sales, cost of goods, expenses and even calculate monthly statements. It contains:

• Monthly Budget Worksheet: Helps you set your income and expense goals so you can plan the month like a real CEO.
  
• Daily Sales Tracker: Capture each sale the moment it happens—online or offline. You’ll finally know if IG is selling more than your shop.
  
• Cost of Goods Tracker: Helps you log every restock, production cost, or transport fee tied to making your product.
  
• Daily Expense Tracker: From data, rent, fuel to small-chops-for-customers type expenses—nothing escapes.
  
• Monthly Summary Sheet: A one-page financial recap to calculate your profit or loss at a glance.
  
• Financial Statement Worksheet: Automatically connects all your records to show gross profit, net profit, and more.

It even includes notes sections so you can jot down anything important: market events, unusual costs, payment delays, and more. 

Many business owners who purchased this journal have given amazing testimonials and you can join them too. Get yours by either visiting our Selar store or chatting with our sales personnels on WhatsApp to get a copy.

If you’re tired of guesswork and you’re ready to take control of your business finances, then grab your own copy of the MyCEO Tribe Financial Management Journal now.