Revenue in business is the total amount of income generated by the sale of goods or services, before any costs or expenses are taken out1. Revenue is also referred to as sales, or turnover. It’s a key indicator of a company’s performance and success.
Revenue is important for any business because it is the lifeblood of the organisation. It helps provide the necessary capital to grow, reinvest, and create a sustainable business.
Here are some of the most common sources of revenue for businesses:
Sales of goods and services. This is often referred to as the ‘top line’ of a business and is the most known source of revenue for most businesses.
Advertising. Many businesses use advertising to attract customers and generate revenue.
Affiliate programs. Affiliate programs are partnerships between an advertiser and a publisher where a commission is paid for referrals from the publisher.
Donations. Charities and other non-profit organisations rely heavily on donations to generate revenue.
Grants. Grants are funds provided to organisations by outside organisations such as governments, corporations, or businesses, usually with a specific purpose.
Investment income. Investment income is money generated by investing in stocks, bonds, or other securities2.
Revenue is an important metric for businesses of all sizes, as it is the basis for all financial decisions. Knowing the sources and amounts of revenue that the business is generating can help determine how much money needs to be allocated to different areas of the business. Additionally, it is a useful tool to benchmark and track performance over time.
