As Featured In

How Founders Misread Revenue (And What to Do Instead!)

May 28, 2025

How often do you look at your revenue… and then move straight onto profit?

That one number - “how much did we generate?” - feels like it should be enough. But this week, we guided our business scale academy clients through a deeper lens.

Revenue on its own doesn’t mean growth. It doesn’t mean profit. And it doesn’t even mean you’re headed in the right direction.

It’s simply a signal… and like any good signal, it only works if you know how to read it.

What Business Owners Commonly Do With Revenue

1. They look at the top-line number… and move straight onto profit.

  • Many business owners check their revenue monthly and feel either satisfied or anxious, but they don’t dig deeper into where it came from, what it cost, or what it means.

2. Celebrate it as a win… without context.

  • It’s easy to celebrate a high-revenue month. But without understanding margin, cost of sales, or delivery capacity, that win may be short-lived. Revenue growth does not equal business health or sustainability.
What The Best Business Owners Do Differently
The Numbers That Signal Real Growth

Revenue is the number most founders track first. But if you're not digging deeper into revenue, you're likely missing the data that reveals where growth is coming from (or where it’s being held back!)

Here are three areas to look at this week:

1. Key Drivers of Revenue

  • How much revenue is each product or service generating as a percentage of your total sales mix?
  • Which ones are growing, slowing, or staying consistent?

2. Customer Composition

  • Which channels, platforms, or partners are driving sales as a percentage of the total?
  • What’s your customer acquisition cost?
  • What is the percentage of revenue comes from new vs returning customers?

3. Key Metrics to Maintain or Grow Revenue

Are you tracking the right metrics for your business model? Set some time aside to identify what are the most important metrics to track for your business. Here are some that you can start with to get the juices flowing.

  • Average transaction value = Total Revenue / Number of Transactions
  • Lifetime customer value = Average Transaction Value × Purchase Frequency × Customer Lifespan
  • Average Revenue Per Customer = Total Revenue / Total Customers
  • Repeat Purchase Rate (%) = (Number of Customers with >1 Purchase / Total Customers) × 100
  • Churn Rate (%) = (Customers Lost During Period / Customers at Start of Period) × 100
  • Delivery Capacity Utilisation (%) = (Sales Volume / Delivery Capacity) × 100

4. Leading Indicators of Future Revenue

Are you only tracking results after they happen? Or do you have visibility on the front end? These are some of the key metrics to monitor daily, weekly, or monthly, depending on your business:

  • Consultations booked
  • Leads generated
  • Proposals sent
  • Sales closed
  • Pipeline value
  • Conversion Rate (%) = (Number of Conversions / Number of Leads or Visitors) × 100

The best businesses don’t just track what has happened. They predict what’s about to happen, and plan accordingly.

A Simple Shift You Can Make

This week, we shared a simple revenue & leads pipeline tracker in our Business Scale Academy.

The tool follows the journey from lead to income, helping founders spot inefficiencies, and hidden revenue opportunities and act fast.

Even if you’re not using a tracker like ours, start with asking yourself the questions in this newsletter.

This basic journey will show you where the friction (and opportunity!) really lies.

Final Thought

Revenue is important. But without looking deeper at that number, it’s only one part of the story.

If you’re not looking beneath the surface, you may be missing the very insights that could unlock your next level.

Clarity comes when you track the right things, and act on what they tell you.

Charlotte & John | Founders Business Scale Academy

Scale Your Business, Impact & Legacy.
Join the Beyond Scaling™ Workshop