Question

You speak to a business owner that is taking in almost $2,000 in revenue each month. The owner still says that they’re having trouble keeping the doors open. How can that be possible? Use the terms revenue, expenses, and profit/loss in your answer.

write a short paragraph writeen by a 7th grader

Answer 1

Even though the business owner is making almost $2,000 in revenue each month, they might still be struggling to keep the doors open because of their expenses. Expenses are the costs of running the business, like rent, utilities, and supplies. If the owner’s expenses are higher than the $2,000 they are bringing in, they will have a loss instead of a profit. For example, if their expenses are $2,500 each month, they would be losing $500. So even though they are making money, if their expenses are too high, it can be really hard to stay in business.