The Big 4 Personal Use Ebook

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Why Revenue Matters

So if profit is what's going in the bank and revenue is only what's passing through, why does revenue 'matter'?

There are several reasons.

For starters, high revenue is good for the economy. The higher your revenue, the more you will be encouraging money to move around. This helps to keep people in work and it helps to keep driving interest rates up. Companies that turnover a lot of money are valuable to the economy and so this is generally a behaviour that should be encouraged.

Another consideration with revenue is that it can be seen as potential and can indicate your product or service has worth. Ultimately, your revenue tells you what people are

willing to pay for what you're selling and it tells you how many people are willing to pay that amount. A company with high revenue is a company that is selling a great product or service.

This also means that if you can find ways to lower your overheads/expenses/COGS, you can earn more money. That money is being given to you and the only reason you aren't keeping it is because of what you have to do with it. Your job is to keep as much of that money as as possible.

The final reason that revenue is so important is that it provides you with one of the single most effective ways to increase your profits. Saying 'I'm going to increase profits' is a very vague statement and one that's difficult to execute due to the sheer number of factors involved. Conversely though, aiming to increase revenue is a lot simpler and nicely narrows your efforts.

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• License: Personal Use
• Category:Ebooks
• Tags:2015 Ebooks Personal Use