BusinessBasics
Revenue Is Not Profit: Why Businesses Still Run Short of Cash
A full order book and yet a tight bank balance: how revenue, profit and liquidity are connected, and where the money gets held up.
Section
Business
Entrepreneurship, business models, start-ups, growth, succession
How companies earn money, grow and change hands: Business explains business models, figures and decisions so that founders, business owners and the self-employed can apply them in their own firm.
BusinessBasics
Recurring Revenue: The Business Models Behind It
Subscriptions, maintenance contracts, usage fees: why predictable income makes companies more stable, and what it requires.
BusinessFocus
Buy a Business or Start Your Own?
Succession instead of a fresh start: what speaks for buying an established firm, what speaks for founding your own, and how to compare the two soberly.
Do the maths
Break-even Calculator
At which volume an offer pays for itself, and how far revenue and profit lie apart.
Business glossary
Terms from Business
- Annual recurring revenue
- Revenue that recurs every year from ongoing contracts, ARR for short. In simple terms, it is monthly recurring revenue multiplied by twelve.
- Asset deal
- A business acquisition through the purchase of individual assets such as machinery, stock, the customer base and rights.
- Capitalised earnings method
- A business valuation method (Ertragswertverfahren) that derives the value of a company from its expected future earnings and discounts them to the valuation date.
- Cash flow forecast
- A preview of incoming and outgoing payments that shows whether a company will be able to pay its bills on time in future.
- Churn
- The cancellation rate, meaning the share of customers or of recurring revenue that is lost in a given period.
- Contribution margin
- Revenue minus variable costs, that is the amount that contributes to covering fixed costs and to profit.
- Customer acquisition cost
- Spending on advertising, sales and discounts divided by the number of newly won customers. In German it is called Kundengewinnungskosten.
- Customer lifetime value
- The revenue or contribution margin that a customer is expected to bring in over the entire duration of the business relationship.
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