Guide to Annual Business Revenue: What It Is and How It Works

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What Is Annual Business Revenue?
How Does Annual Business Revenue Work?
Calculating Annual Business Revenue
Annual Business Revenue Example
Necklaces: $200 Rings: $100 Bracelets: $75
Necklaces: $200 x 500 = $100,000 Rings: $100 x 750 = $75,000 Bracelets: $75 x 1,000 = $75,000
What Is Annual Business Revenue Used For?
Distinguishing Net Business Income from Gross Annual Revenue
Types of Revenue
Operating Revenue
Non-Operating Revenue
Interest If your company offers financing to customers or invests in the stock market, the interest you gain from these transactions falls under non-operating revenue.
Dividends If your business invests in shares of another company, the profits you earn from this investment are part of your company's annual non-operating revenue.
Rent income If you rent property or equipment, the money you receive from these rentals is part of your annual non-operating revenue.
Asset and capital sales If you sell a piece of equipment to another company, then the sale price is part of your annual non-operating revenue.
Contra revenue Unlike the other non-operating revenue, contra revenue has a negative value. Contra revenue, which can include returned goods, unpaid invoices, and unsold inventory, is a deduction from gross revenue.
The Takeaway
Small Business Loan Tips
Generally, it can be easier for entrepreneurs starting out to qualify for a loan from an online lender than from a traditional lender. Lantern by SoFi’s single application makes it easy to find and compare small business loan offers from multiple lenders. If you are launching a new business or your business is young, lenders will consider your personal credit score. Eventually, though, you’ll want to establish your business credit. If you need to borrow money to cover seasonal cash flow fluctuations, a business line of credit, rather than a term loan, provides the flexibility you likely need.
Frequently Asked Questions
About the Author
Susan Guillory is the president of Egg Marketing, a content marketing firm based in San Diego. She’s written several business books, and has been published on sites including Forbes, AllBusiness, and Cision. She enjoys writing about business and personal credit, financial strategies, loans, and credit cards. Follow her on Twitter @eggmarketing.
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