Difference Between Revenue and Profit

What’s the difference between REVENUE and PROFIT?! There is a simple answer to that! EXPENSES!

But why am I bringing this topic up.. because I see a lot of people confusing which is which… especially people whose first language isn’t english..

That’s the one reason.. and the other one is entrepreneurs.. who try to confuse people with bigger numbers talking about revenue or sales.. because this number is bigger.. Then profit.

So what is revenue?

revenue – income, especially when of an organization and of a substantial nature

Example:

* Lets say you have a company and you are selling phones.

* 1 phone costs $1 000 to a customer

* and you sold 10 phones

* NOW the REVENUE for your company is $10 000

So what is profit?

profit – a financial gain, especially the difference between the amount earned and the amount spent in buying, operating, or producing something

Example:

(continuing the same example from before)

* Let’s say it cost you $500 to make that phone you sold for $1 000

* It means you make $500 profit for each phone you sell

* Total profit for your company for that 10 phones is $5 000

PS! Every entrepreneur has to know his/her numbers. You have to know how much to ask and how much you spend to offer your goods or services to your clients. There are some simple costs like making a product.. and then there are some more complex costs like marketing, managing, etc…

I hope you got value from this post… if you did.. leave your thoughts down below in the comments..

Be Smart & Be Wealthy

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