In part 2 of Revenue Growth, Caroline and Erica give a step by step for comparing year to year revenue growth. 

1st. Start by pulling total revenue by each year you want to compare. Then, break it down into categories. (class fees, private lessons, merch sales) to see which categories grew and which shrank. 

2nd. Calculate your revenue growth. This year's revenue, minus last year's revenue, divided by last year's revenue, multiplied by 100. Example: Let's say in 2023 your revenue was 120,000, and in 2024 it was 150,000. Your growth rate will be 150-120x100=25%. Your revenue grew 25%! 

3rd. Analyze by revenue stream. Did your enrollment increase or decrease? How did sales from merch compare year to year? Were there more or less events, and how much revenue did those generate? This will help you pinpoint what in your studio is growing, and what needs to be eliminated. 

4th. Adjusting for external factors. You’re going to want to consider any major changes that could have affected your revenue. Maybe you changed pricing, added/lost instructors, or expanded your space. You want to make notes of these things when comparing revenue, so you can understand the context of your growth/decline, which will help you create strategies to balance out these changes. 

5th. Accounting for the cost. It’s important to compare how expenses have changed alongside revenue. Growth and revenue is great, but if costs increase at a higher rate, your profit margins may be shrinking. (Profit and profit margin will be discussed next week!)

Understanding your reports is essential to identify and track these important KPI’s! If you’re a client, we can set up and run your reports however you need. 

Use these steps to assess not just how much your revenue has grown, but where it's coming from. They will help you make data driven decisions for the growth and sustainability of your studio!