First Business Story
Revenue minus expenses, per-hour rates, and quick percentages of business numbers.
Best in your head · no pen, no calculator why?
New. Learn first, or start a round.
the lesson
Read the lesson
The idea
Revenue is the money that comes in from sales. Expenses are what the business costs over the same period. Profit is revenue minus expenses: a café with $3,000 of sales in a week and $2,200 of expenses made $800. When expenses are bigger, the answer is a loss, written with a minus sign.
Per means divide by the thing after it. A percent is a share out of 100, and every share is out of a whole. When a group changes, use the whole the question names.
Techniques
Per means divide
- Find the thing named after "per": hours, jobs or customers.
- Divide the revenue by that number.
- Half hours? Double both numbers first; the answer stays the same.
worked example
A job brings in $375 and takes 2.5 hours. What is revenue per work hour?
- Double both: $750 and 5 hours.
- $750 ÷ 5 = $150, the revenue per hour.
Answer: $150
Build a percent from 10%
- 10% is the amount ÷ 10, and 5% is half of that.
- 1% is the amount ÷ 100. 25% is a quarter, 50% a half, 75% three quarters.
- Combine the pieces: 15% is 10% plus 5%, and 30% is three lots of 10%.
worked example
A design studio asks for a 15% deposit on a $2,600 order. How much is the deposit?
- 10% of $2,600 is $260.
- 5% is half of that: $130.
- $260 + $130 = $390.
Answer: $390
Share of the starting group
- The whole is the group you started with. Leave out anything added later.
- Divide the part by that whole.
- Move the decimal point two places right for the percent: 0.15 is 15%.
worked example
A cleaning service starts the month with 40 clients. 6 of those 40 cancel, and 5 new clients sign up. What percentage of the starting clients canceled?
- The whole is the 40 starting clients. The 5 new ones are not in it.
- 6 ÷ 40 = 0.15 = 15%.
Answer: 15%
Tips by skill
- TipProfit for the period: Revenue minus expenses for the same period. If expenses are bigger, it is a loss: put a minus sign in front.
- TipRevenue per hour: Divide the revenue by the thing after "per". For half hours, double both numbers first.
- TipQuick percent of a business number: Start from 10%, the amount ÷ 10. Halve it for 5%, divide the amount by 100 for 1%, then combine.
- TipWhat share of the group?: Divide the part by the group you started with, not the ending count. Then write the decimal as a percent.
Watch out for
- Treating revenue as money the business keeps. Expenses come out first, and only what is left is profit.
- Reading revenue per hour as what the owner earns per hour. Costs have not come out yet.
- Moving the decimal point the wrong way. Check with 10%: it is always the amount ÷ 10.
- Dividing by the ending count, or counting newcomers. The share is out of the starting group.
skills · practice stats
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Profit for the period not tried yet
worked example
A bike shop brings in $4,400 of revenue this month. Its total expenses for the month are $5,150. What is its profit for the month? (Use a minus sign for a loss.)
Answer: -$750.00
- Profit = revenue − expenses for the same month: $4,400 − $5,150 = −$750.
- Expenses are bigger than revenue, so the result is a loss.
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Revenue per hour not tried yet
worked example
A design studio brings in $2,800 from 14 jobs. What is revenue per job?
Answer: $200.00
- Divide by the thing after "per": $2,800 ÷ 14 jobs = $200 per job.
- That is revenue per job, not profit per job.
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Quick percent of a business number not tried yet
worked example
An invoice for $1,780 is paid late and carries a 10% late fee. How much is the late fee?
Answer: $178.00
- Build it from anchors: 10% of $1,780 is $1,780 ÷ 10 = $178.
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What share of the group? not tried yet
worked example
rest ladder
- 1 day
- 3 days
- 7 days
- 14 days
- 30 days
- 60 days
- mastered · every 90 days