revenue
Revenue is all the money coming into a business before any costs are taken out, and it is the number people brag about.
In plain English
Revenue is the top line. Everything a business sold, added up, before a single cost has been subtracted.
It is also the number every founder quotes at a party, and it is almost meaningless on its own.
A business turning over ₦100 million a year sounds impressive. If it spends ₦105 million to do it, that business is dying beautifully. Meanwhile a business turning over ₦20 million and spending ₦12 million is quietly making its owner ₦8 million and nobody is impressed at all.
Revenue tells you the size of the machine. Profit tells you whether the machine works. Cash flow tells you whether it survives long enough to find out.
This matters enormously in Nigeria, where businesses can look enormous and be desperately fragile. High turnover with thin margins and slow paying customers is one of the most dangerous positions in commerce, and it is dressed as success.
Be suspicious of anyone who leads with revenue. Ask what is left after everything is paid. That question, asked politely, ends a surprising number of conversations.
Two businesses. One earns ₦200 million and keeps ₦4 million. The other earns ₦30 million and keeps ₦9 million. The first owner is celebrated. The second owner is richer, and sleeps better.
Questions people ask
What is the difference between revenue and profit?
Revenue is everything that came in. Profit is what remains after every cost. A business can have enormous revenue and no profit at all.
What is turnover?
Another word for revenue, used commonly in Nigeria and the UK. It means the same thing.
Why do founders focus on revenue?
Because it is the easiest number to grow and the most impressive to say. It is also the one that tells you least about whether the business works.
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