From – “Cover Your Nut” 1.2 Basic Accounting Principles

You must understand that the only reason that you are starting a business is to make money, and to do so you must have the tools to accomplish this.  “Cover Your Nut” is a general term for covering the costs and expenses of your business to make a profit, and something that is often left out in the early planning stages of a business.  In order to make money with your business, the first step should be to see at what point in time, and with what revenue, will I cover all of my costs and expenses.  The “Cover Your Nut Principle” is the most important step that you can make toward being successful in reaching the original goal for starting a business, (making money).