Ways to increase revenue and profit

Revenue is the income earned by the business entity through its day to day operations. Profit is the gain of the company i.e. when the amount earned exceeds the amount spent, the result would be profit. If revenue is the backbone then profit is the lifeblood of the business.
Both should go hand in hand for the long term survival of the concern. Many think that the two terms are synonymous but there is a difference between revenue and profit.

Key Differences between Revenue and Profit

1. Revenue is the amount received by the business through various trading activities while Profit is the surplus left after reducing all types of expenses and costs.
2. Revenue is necessary for running the business efficiently and effectively. On the other hand Profit is necessary for the survival and growth of business in the long run.
3. Revenue is not dependent on profit in any way, but profit is dependent on revenue. In other words, the more the revenue the more is the profit.
4. For Example: distinguishing Revenue and Profit- A company sells cars, so the amount received from the sale of a car is considered as a revenue but if the revenue exceeds the cost of production (i.e. Material used, salary, lighting expenses, insurance, taxes, etc.) then it is a Profit.

Ways to increase revenue

• Offer a quality product at reasonable prices.
• Offer Discounts.
• Spread knowledge about the goods and services through advertisements.
• Provide after sales services.
• Provide rebates.
• Expand area of operation.
• Charge fair prices.

Ways to increase profit

• Remove unnecessary expenses.
• Give less discount.
• Use inventory control systems.
• Avoid wastage
• Take discounts from suppliers.
• Increase price wherever necessary.
• Find new customers and market.
• Add new product lines.