What is Total Revenue?

A Simple Guide Hey everyone! Today we’re going to talk about something called Total Revenue.

Think Of It Like This:

If you have a lemonade stand and you sell cups of lemonade, the money you get from selling all those cups is what we call Total Revenue. It’s all the money you make before you take away the costs, like how much you paid for the lemons and sugar.

Why is Total Revenue like a Scoreboard?

Total revenue is like keeping score in a game. It tells you how well your business is doing. If you sell more lemonade or each cup at a higher price, your score—that is, your total revenue—goes up. It’s great to have a high score because it means you have more money to spend on things you need, like more lemons to make more lemonade!

When You Sell Different Things

Imagine you don’t just sell lemonade; you also sell cookies and maybe some fruit. All the money from the lemonade, cookies, and fruit together is your Total Revenue. It’s good to sell different things because if one day no one wants lemonade because it’s cold, they might still buy cookies. That way, you still make money even if it’s not from lemonade.

Why the Price Tag Matters

The price of your lemonade matters a lot. If you make your lemonade super special and tasty, maybe you can charge a little more for it. But if you make it too expensive, your friends might not buy it, and if it’s too cheap, you won’t make enough money. Finding the best price is important for getting a good Total Revenue.

Total Revenue Tells Us a Story

The money you make can tell you a story about your lemonade stand. If you make more money this week than last week, it could mean your lemonade is becoming more popular, or maybe you had a really good sign that brought in more people. This story helps you figure out how to make your lemonade stand even better.

Keeping an Eye on Total Revenue

You want to keep track of how much money you’re making so you can see if you’re getting better at selling lemonade or if you need to change something, like your sign or maybe add a new flavor. So, total revenue is pretty important. It’s like the big number at the top of your scorecard that tells you and everyone else how your business is doing, and you want to make that number as big as you can by being smart about what you sell and how much you sell it for!

Gita Faust

About the Author

Gita Faust has over 30 years of accounting experience in the real estate and property management industry, Gita Faust is more than just a real estate investor; she is also popular for her work as an accountant, consultant, mentor, speaker, QuickBooks Top ProAdvisor, QuickBooks Solution Provider, member of Intuit’s Trainer/Writer Network, and, of course, author. Gita is well-known for her exemplary leadership and advisory skills. In fact, she even helped pioneer the adaptation of QuickBooks to suit the needs of professionals in real estate and property management. To share her knowledge she has written a series of courses titled Simplified Accounting Solution, which provides step-by-step guidance for those working with QuickBooks.

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