The Mathematical Model of Business

We have certain equations in Business, which when implemented, can see revenue and profit rise.

Equation 1

Profit = Revenue - ( Fixed Cost + Marketing Exp + Variable Cost* Volume )


Equation 2

Revenue = Products* Volume

Equation 3

Volume = Number of Customers

We find for every rupee invested in marketing, there will be a 400% rise in revenue and 100% rise in profit. So we have to invest in Marketing. Marketing is the life blood of business !

Profit = (P*V)-( Mexp + FC + VC* V )


P = Product
V = Volume
Mexp = Marketing Expenditure
FC = Fixed Cost
VC = Variable Cost

So for Revenue = (P*V) to rise, we have to increase Marketing Expenditure ( Mexp ), as Volume ( no of customers ) is directly proportional to Marketing Expenditure !

Actually this equation, Profit = P*V - ( Mexp + FC + (VC*V))is a differential equation, as V or Volume is a function of Marketing Expenditure or V = f(M) !



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