Revenue Growth: How Can You Understand, Calculate and Improve It

September 17, 2021

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Revenue growth is the increase or decrease in a company's sales between two periods. The revenue of a business is the amount of money it earns from its business activities. Today's start-ups require a fundamental shift in their revenue mindset. Revenue growth, together with profitability, are the variables that determine a company's health.

Revenue growth should be calculated using two different methods: year over year (YOY) and growth over year (GOY). The YOY growth of a business signifies revenue earned over the prior year in the same quarter. The GOR or growth of a company shows the growth over the preceding quarter. Some businesses calculate revenue growth using sequential quarters, whilst others compute the growth rate on an annual basis.

If your revenue is declining, you must first understand why it is dropping before deciding how to solve the problem. You may be experiencing a decrease or stagnation in the amount of sales into existing accounts. If that is the case, you should review your land and expand strategy or targeting to see if the accounts you are selling into have the potential for future expansion or upselling. If you are seeing increasing competition from a new or existing market, you may need to target a different market.

More revenue can be obtained in a number of ways. You can forecast future revenue growth by examining your potential customers' behavior and demands and determining how you can solve their business challenges and meet their needs. Businesses who have a one-of-a-kind potential to serve a niche or specific consumer group and deliver solutions would benefit greatly. By understanding who you serve, you can present yourself and your product as strategic partners rather than just a provider. This will help you keep more customers because you are providing solutions that their company cannot afford to be without.

When you couple all of this with a platform that aligns your marketing and sales efforts and helps you put real numbers to them, your company will be at a better competitive advantage than using the traditional business as usual sales and marketing tactics. Reach if you’d like to discuss- always happy to share insights and compare notes. 

About the Author

Gloria Gunn

Co-founder - LinkedSure

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