When it comes to building and operating a franchise venture, the most pivotal indicator of your business’ success is the profit margins, but for first time business owners, profit can be a confusing prospect.

With respect to tax, interest and operating expenses, profit is more than just the amount of money coming into a business, and understanding your bottom line is critical.

In order to have a healthy business, you must have a healthy profit, but what does that actually mean?

Franchisees will encounter three different types of profit; the net profit, the operating profit and the gross profit, with each giving a detailed overview of certain operational aspects.

Here, Inside Franchise Business sheds some light on what those profit terms mean and how best to chart the financial health of your business.