Revenue and profit: why aren’t they the same thing?
Revenue is all the money that comes in. Profit is what’s left at the end, once the costs are paid. At the summer party, lots of people buy lemonade, and the revenue is huge. But the cups are filled to the brim, and refills are free. So almost nothing is left over. Christian sums it up: Our revenue is huge, only our profit is almost gone.
Good to know: we explain how things work in Germany, where the books are set. Rules and numbers can be different where you live.
That’s how the guinea pigs explain it in Volume 3: Rocky Becomes the Boss!
What’s the difference between revenue and profit?
Revenue and profit aren’t the same thing. Revenue is all the money that comes in. Profit is what’s left at the end, once the costs are paid. At the summer party, lots of people buy lemonade, and the revenue is huge. But the cups are filled to the brim, and the sign says “free refills.” So the same lemon goes across the table three times for nothing. Christian sums it up: Our revenue is huge, it’s just that our profit is almost gone.
How do you turn lots of revenue into profit, too?
By getting the costs under control. Mr. Grey says the most expensive mistake a young boss can make is forgetting that revenue is not profit. The fix in the book is very practical: fill the cups properly, drop the free refills, and move the table off the hay bale and onto the ground. After that, a small profit is left, and it gets split up: part goes into the reserve, part into the next stand, and a little bit into the guinea pigs’ cash box.
- Revenue is not profit. Mixing them up is the most expensive mistake a young boss can make.
- You only end up with a profit if you get your costs under control.
- Part of the profit goes into the reserve, part into the next stand.
Umsatz
revenue
In the books, every paragraph is in German with the English right below it. That way you pick up new words in both languages along the way.
Your turn: take the quiz
No account, no score, nothing gets saved. Just tap an answer.
1. What is revenue?
2. Why does the stand at the summer party earn almost nothing?
3. What does Rocky get right in the end?
Idea, costs, revenue, profit and responsibility.
Volume 3: Rocky Becomes the Boss!
Idea, costs, revenue, profit and responsibility. For kids 10 and up, bilingual German and English, 52 pages, illustrated in full color throughout.
