Learning objective
Distinguish revenue models and understand why revenue is not profit.
Financial / strategic concept
Revenue − All costs = Profit. A large revenue figure can hide a loss.
Explanation
A revenue model is the repeatable way money moves from a customer to your business: one-time sales, subscriptions, retainers, licensing, commissions, or usage fees. Revenue is the money collected. Profit is what remains after the costs of producing, delivering, acquiring, and operating are paid. The customer-to-revenue process is: a customer discovers you, trusts you, decides to buy, pays, and receives value.
Practical example (hypothetical)
Hypothetical: A bakery sells 400 cakes at $50 = $20,000 revenue. Ingredients and labor cost $9,000, rent and software $6,000. Profit is $5,000 — one quarter of revenue.
Exercise
Write your revenue model in one sentence: “Customers pay me [amount] for [offer], [how often].”
Connect to your business: Record this in Workbook Section A and B.