Understanding your revenue drivers
You produce revenue through your usual business activity, by making sales, getting your invoices paid, or taking cash from paying customers.
For your business to make money, you need to generate revenue.
You produce revenue through your usual business activity, by making sales, getting your invoices paid, or taking cash from paying customers. So, the better you are at selling your products/services and bringing money into the business, the higher your revenue levels will be.
But what actually drives these revenue levels? And how do you get in control of these drivers?
Knowing where your cash is coming from is more crucial than ever
As a trading company, you face the multiple challenges of a global recession, an increase in online consumer buying and a ‘new normal’ when it comes to trading, markets and buying expectations. The better you can understand the nature of your revenue and its drivers, the more you can flex, manage and control your ability to generate this income.
This helps your medium to long-term strategic thinking, and your decision-making, allowing you to be confident that you’re focusing on the business areas that deliver maximum revenue.
Important areas to consider will include:
Revenue channels - where does your revenue actually come from? Do you create income from online sales and ecommerce, through retail sales in bricks and mortar stores, or through wholesales to other businesses? You may focus on just one of these channels, or it could be that you use a mixture of two, three or more.