What Determines Revenue Growth?
Revenue growth is determined by how much money your company made as a whole. That includes all your sources of income (sales, royalties, fees, investments, etc.). Depending on the goal, business owners will look at their revenue growth from an entire fiscal year to monthly to make decisions.
Revenue growth is generally calculated by taking the current period’s revenue minus the prior year's revenue and then dividing that number by the prior-year revenue.
So, for example, if your company made $90 last year and $100 this year, you would have revenue growth of 11%.
What is the Difference between Growth Revenue and Sales?
Although they both bring in money for your business, growth revenue and sales are not the same things. Sales and earnings actually fall under the umbrella of revenue growth.
Sales are the amount of money your company makes from selling a product or service for a period of time. That number doesn’t take into account expenses. That’s what earnings are for. Earnings are what deducts expenses from your growth revenue.
So, in a nutshell, growth revenue is the amount of money your company brings in over a pre-determined amount of time from sales and other sources of income.
What Are Some Ways to Accelerate Your Growth Revenue?
Similar to how you always hope your checked luggage manages to get to the same destination as yourself, growth revenue is not something you set a goal for and forget about. Growth revenue should be considered a strategy that you’re always putting effort into, like decorating your bag with an unmistakable ribbon or only bringing a carry-on item when you travel.
Consider how you deal with repeat customers. Is there a reward or incentive to keep shopping with you? If your company is product-based, you could set marketing goals to appeal to consumers with discounts, new inventory, bundled products, or free shipping.
If you haven’t already, conduct some market research. How do consumers feel about your current products or services? What are your competitors doing that you’re not? Implementing a full-funnel marketing plan can help revamp your business and generate fresh interest that fuels your revenue growth for the future.