Revenue vs. Profit

by wecare on March 31, 2008

euro dollars

Revenue is the money that comes into your business.  It does not take into account expenses and cash outflow.  As a result, revenue is not a good measure of sustainable success.  This is especially true when the necessary cost of doing business is high.

Profit is that money that your business retains after all expenses have been paid and accounts have been settled.  Profitability (and not revenue) is a much more accurate measure of the potential sustainability of your business success.

UpwardAction for Success Challenge:

Don’t get overly excited by revenue (aka gross profits).  Instead, pay attention to how much income your business is able to retain.  This is the true measure of your business’ financial success.

 

Always – Live with Passion

T.C. Coleman

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{ 2 comments… read them below or add one }

1 Cola Tax & Solutions 04.22.08 at 12:02 am

Accurate bookkeeping and accounting are key in having accurate financial statements. Financial statements help express how well a business is doing and are great forecasting tools. Also great cost accounting is key in making your profits higher without having a higher revenue.

2 Life Coach Courses 05.10.08 at 5:11 am

‘Don’t get overly excited by revenue (aka gross profits). Instead, pay attention to how much income your business is able to retain.’ True, its just fun when you see the revenue come in!! you can get carried away with it.

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