Revenue
Total income before costs
It's the money that comes into your company from sales, before subtracting expenses. It's not profit. If you sell 100 products at $50, your revenue is $5,000 even if your costs are $4,000.
How to explain revenue vs. profit to your team?
Say: 'Revenue is everything we sell ($100K). Profit is what's left after costs ($20K). We can have high revenue and low profit if we spend a lot. The goal is to grow both, but profit is the real health.'
Real examples
Celebrating revenue milestone
“Instead of: 'We achieved $1M in sales.' Better: 'We achieved $1M in annual revenue. With 30% profit margin, we generate $300K in profit. Revenue shows demand, margin shows sustainability.'”
Investor asks about unit economics
“Instead of: 'We sell a lot.' Better: 'Revenue per customer: $500/year. Acquisition cost: $100. Service cost: $150/year. Each customer generates $250 in profit. Revenue grows, and it's profitable.'”
Team confuses revenue with available budget
“Instead of: 'We have $50K, we can spend.' Better: '$50K is revenue this month. After operating costs ($35K) and salaries ($40K), we have a deficit. Revenue is not available cash.'”
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