UX Design | Business lingo – Profit, revenue, margin as an orange? | Business Tackle Part 5

Revenue, profit, margin I’m a designer. I don’t really need that, right? Welcome to 99grit. My name is Andy and it is our vision to inspire You to chase your dreams and turn those dreams into tangible Design Careers through learning new design skills and being accountable. Today I want to talk to you about the business lingo – like the real juice of the business lingo. These are 3 elements that I wanted to mention as a designer myself, It took me a while to get familiarize myself with these elements. I actually wanted to use a prop which is like an orange today to show you what I mean. I’m going to use that as an analogy for how to describe what a revenue is, and what profit is or margin? I wanted to use some sort of a prop – like an orange to show you what I mean when it comes to the least, seemingly difficult elements of the business. Well, the revenue itself I would say – is the size of the orange. Is basically how much cash is being generated by your company, regardless of whatever happens, of your cost structure -how much it cost you to actually run the business. This is at the end of the day – all of the euros, dollars or whatever currency you’re working with – that come into the company door and stay there. At least for some amount of time, in some time intervals. The revenue is basically the maximum – full extend of the money that your company is bringing in. That’s the revenue. As you are probably aware – when people say “revenue sharing” or “the revenue impact” or a “business-related revenue goals” – these are the elements of talking about when it comes to the revenue – how much cash is actually coming in through the door. So that’s the first thing. Obviously, to run a company, you need to pay the people, you need to get some equipment, you need buy some laptops, have some company cars, rent out an office. All of these elements are the basically the cost structure of how your business operates. So the revenue is the cash that you bring in – that’s the size of the orange. The cost is the amount of work when it comes to resources people you need to have in your team. I’m get the gear etc. to actually squeeze that orange – this is the work that you’re doing. You’re bringing the revenue in and you’re squeezing the orange – that’s the cost structure. Obviously the difference between whatever money you bring in and the amount of working need to put into actually squeeze the orange – the juice that falls out of the orange is the actual profits. So I’m I hope that this analogy is understandable for You. But basically what we’re trying to do is generate, as much revenue as a business, minimize our costs – so the amount of juice blowing out of the orange is substantial. So we want to the ideal situation for a business is to have the biggest orange possible, the least amount of work to squeeze the thing and get as much juice blowing out of it as possible. It’s basically the mechanism. If you take all of the revenue you subtract the cost that actually cost you to run the business – whatever’s left – that’s your profit. Obviously before tax, but I don’t want to go into the taxing issues. It’s really simple when you actually break it down – how that’s structured. So I hope that this shows you, and puts you in a little bit more comfortable space when it comes to as a designer – why should I care? I mean, our services and products – they cost work, they cost time – which is a resource as well, and it’s basically improves the business. Hopefully, through our design skills, when we putting them together and trying to put some more Innovations in to our products and services – to make it run more smoothly and basically make the business generate probably more revenue and more profits and maybe even looking at the margins or at the cost structure to mitigate some of the costs there. I hope this is understandable now, and it’s not that difficult subject for you guys anymore. And yeah, that’s it for this vlog. If you feel that this is beneficial for you, let us know, give some feedback on these videos, join up to the Facebook and Linkedin communities, subscript YouTube channel, join the Facebook Monday LIVE – Design Almanac. I’d be really glad if I could see you there. Go to 99grit.com sign to our webpage – the first section of the design thinking masterclass – a big program of a design thinking – is available for FREE if you sign up. So check it out and I hope that you enjoy that piece of content. We will be generating quite a lot of content in the nearest future. I’m looking forward to seeing around there. And yeah, post the comment – I like the video, whatever works for You guys. So looking forward to seeing you soon. Stay tuned. See you around.

About the Author: Garret Beatty

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