Revenue. It's what every business needs to survive. But what exactly is revenue? And how do you calculate it for your business? Let's take a closer look.
Revenue is the total amount of money that a company brings in from its sales of goods or services. To calculate revenue, you simply take the total number of units sold and multiply it by the price per unit. So, if you sell 100 widgets at $10 each, your revenue would be $1,000.
Now that we know what revenue is and how to calculate it, let's take a look at why it's so important.
Revenue is important because it is the lifeblood of your business. It is the money that you bring in from your sales that allows you to pay your bills, keep the lights on, and continue operating. Without revenue, your business would quickly grind to a halt.
There are two types of revenue: gross revenue and net revenue. Gross revenue is the total amount of money that your company brings in from sales before any expenses are deducted. Net revenue is gross revenue minus any expenses incurred to generate that revenue.
For example, let's say you sell 100 widgets at $10 each for a total gross revenue of $1,000. But it costs you $500 to manufacture those widgets, so your net revenue would be $500. Net revenue is the amount of money that actually goes into your pocket—and it's what you need to focus on when making decisions about your business.
Revenue is the lifeblood of any business. It's the money that comes in from sales that allows you to keep operating and paying your bills. There are two types of revenue: gross and net. Gross revenue is the total amount of money brought in from sales before any expenses are deducted while net revenue is gross revenue minus any expenses incurred to generate that revenue. Keep an eye on your net revenues as they are what actually go into your pocket and help make decisions about your business!