Profit
Profit is the amount of money left over after all your costs have been subtracted from your revenue.
Lesson 2
Calculate the Revenue Potential of Your Farm
Back to: Build Your Business
Profit
While there are other things that are important to operating a business (social and environmental impact, for example), generating a profit is the only way your business will be able to stick around for the long term. So, it’s critical that you generate a profit as early as possible.
Definition
Second Year Profit = $9,754 total revenue – $20,066 total expenses = -$10,313
Yes, you’re reading that right: our second year’s profit is negative.
This isn’t unusual but also shouldn’t be taken lightly. Before you go into business, you should have a solid grasp on how long it will take you to achieve profitability and what factors might influence that timeline (such as volume of kelp, a piece of equipment that reduces labor, or a new product that has a better margin). You should also take note of how long your initial investment will last if you experience several years of losses to start and whether there is a point at which you might want to seek outside funding.
GreenWave Resource
Ocean Farm Basic Financial Model