Revenue is neither profit nor cash
Revenue is income arising in the course of ordinary activities of an entity. Profit or loss is the difference between income and expenses at a moment of time.
“Guys, one of the biggest takeaways from my 5 years in business was that revenue is not profit.”
This is what a YouTube influencer recently shared in a video that caught my attention.
The LA-based entrepreneur went on to explain how she sold calendars and planners worth thousands of dollars over five years but was barely breaking even—while not paying herself anything.
Although “absolutely confident, this is the best calendar planner out there,” she is closing the physical part of the business for good.
Revenue is not profit, this seems obvious, especially to those of us in finance. Yet even the most financially savvy people can overlook this fundamental truth when it comes to their own ventures.
⏩ Today's post is not meant to make fun of anyone.
It is meant to be a gentle reminder for all of us running either their own gig or working in corporate. To pause and take a deep breath before investing, signing contracts, or entering financing agreements.
