Re:Back of the Envelope: How to Estimate the Annual Revenues...
by reduxredacted on Wednesday September 15, 2010 @06:57PM
(#1696170)
No doubt!
Though I disagree that it would work for tech companies, since that encompasses such a broad range of companies.
A tech company that serves mostly enterprises may employ far fewer, yet more highly paid employees for customer service, yet a tech company that sells directly to consumers (especially if it's sales that requires a large customer service department) may employ many, lower paid employees.
The other problem I have with all of this is "why revenues"? I mean, that's a valuable thing to know, but without margin or profit, it's an easy figure to game. Ask kozmo.com or MCI|WorldCom or any of the "Generate lots of revenue then IPO" companies of the late 90's early 00's. Investors lost their minds and forgot that if you sell a loaf of bread for US$1.00 and you pay $1.50 for it, you've lost $0.50. You'd be better off not buying the loaf of bread (or, perhaps, getting out of the bread loaf selling business). It tells you nothing you can really trust.
Though I disagree that it would work for tech companies, since that encompasses such a broad range of companies.
A tech company that serves mostly enterprises may employ far fewer, yet more highly paid employees for customer service, yet a tech company that sells directly to consumers (especially if it's sales that requires a large customer service department) may employ many, lower paid employees.
The other problem I have with all of this is "why revenues"? I mean, that's a valuable thing to know, but without margin or profit, it's an easy figure to game. Ask kozmo.com or MCI|WorldCom or any of the "Generate lots of revenue then IPO" companies of the late 90's early 00's. Investors lost their minds and forgot that if you sell a loaf of bread for US$1.00 and you pay $1.50 for it, you've lost $0.50. You'd be better off not buying the loaf of bread (or, perhaps, getting out of the bread loaf selling business). It tells you nothing you can really trust.
(Edit: to fix basic math error)