Revenue vs Profit

beautybusiness consulting May 29, 2021

How Much Do You Make?

Sheesh, accountants are always asking the most invasive questions! Whenever I ask people how much they made last year, without fail, they tell me their revenue number. I understand why. It's easy to figure out, feels more impressive and you worked hard for it. 

But here's the thing. If you are not keeping the money, are you really making it? Here begins the dance between revenue and profit.

What is Revenue?
Revenue, sometimes called income or sales, is the amount of money your clients pay your for services and product. When you are looking at a profit & loss statement, this is the very first number listed, which is why it gets the nickname "Top Line Revenue."

Having a large revenue number can make you feel really proud. You should be. Creating a revenue generating business is hard work. But it's also not the full story.

What is Profit?
Profit is what is left over after you have paid all your expenses. Profit is what you pay taxes on. Profit after...

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