Task 3
In task 3 I have been asked to define what revenue is and how businesses can generate revenue.
When a business receives money from sales, this is called revenue. Businesses can also receive money from other things, not just sales, they can receive money from renting out asserts an example of this is renting out a building to another business.
There are many ways in which businesses can generate revenue. One way in which they can generate revenue is by renting out assets. Businesses can rent out their equipment such as machinery. This can help both the businesses, as the business renting out the equipment will gain money on a monthly basis and the business that gained the equipment will be saving money instead of buying out the equipment fully. Another way they could generate revenue is renting out their premises to other businesses. This helps the business gain more money as they will be renting out another asset which will help them bring more money in rather than just getting money from sales.
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Peer Reviews
Here's what a star student thought of this essay
Quality of writing
The report states the term 'revenue', which is well explained within the report. The report states that revenue is from sales, although this can also include other types of income from rent or other similar ventures. This is quite good, and the exmainer will understand this with ease. In addition, the student states the terms 'Profit' and the difference between 'Net Profit' and 'Gross Profit'. This is quite good, and the exmainer will understand this with ease.
Level of analysis
The student states that businesses can gain revenue by allowing their assets to be used by either a person or buisness. This would generate revenue, however the student hasn't considered if the buisness needs the asset. Could the buisness make more money by using the asset, rather than letting others use the asset? The report has used five examples, to show how the buisness may increase their revenue. This is quite good, although this could be made clearer within the report. The report includes another two examples, of how the buisness may increase their revenue and what this does to their gross profit and net profit of the buisness.
Response to question
In summary, the report is OK. The report states what revenue is and how the buisness can increase the amount of money recived. In addition, the report states how profit is generated though a business, and the difference between gross profit and net profit. However the examples used, could be made more clear within the report as there are slightly messy. The student also should consider some drawbacks of the methods suggested when a business tries to increase their revenue. The report states that the buisness (Delight Lollies) can increase their sales though word of mouth. Although this is false. The customers who has purchased their products may already do this, and there isn't really a method for making people recommend their buisness. It's important that the student understands that this method ins't an effective method for increasing a businesses revenue, as there cannot control this aspect. In addition, their second suggestion was to use a number of offers to attract additional sales. This is good, however the student hasn't considered that the buisness may have to lower the amount of profit there generate due to the promotion. The majority of buisness will be focused upon profit, and revenue is only the amount of money that the buisness receives, and not profit. The student should consider this.
