Money & Economics · free reference
Part 12: How businesses make money: profit, small business and funding
How businesses earn a profit, Small businesses in America and How businesses raise money. Every fact lists its source, and you can share a link to any topic.
Put it to work: build a business
Profit, costs and raising money come alive when your student plans a real business. Start with the free check, then go further with the full version.
How businesses earn a profit
In short: A business earns a profit when the money it takes in from sales is more than the money it pays out.[1]
Facts
- Every business, big or small, tries to earn a profit.[1]3–5
- Total revenue is the money a business takes in from selling its products: the price times how many it sells.[1]3–5
- Total cost is what the business pays to make and sell its products.[1]3–5
- Accounting profit is total revenue minus the money actually paid out: dollars brought in minus dollars paid out.[1]6–8
- Before a business opens its doors, it already has bills to pay.[2]6–8
Go deeper: for teens and grown-ups (1)
- One-time expenses are the first costs needed to start the business. Monthly expenses usually include pay for workers, rent and utility bills.[2]Teens
Key words in three languages
| English | Spanish | Portuguese |
|---|---|---|
| profit[1] | ganancia[3] | lucro[4] |
| total revenue[1] | ingresos totales[3] | receita total[4] |
| total cost[1] | costes totales[3] | not sourced yet |
Each word cites a page that uses it.
Practice this
- Business practice questions, Grade 2Questions from every Business topic in the grade, with answers · freeFree
- Business practice questions, Grade 4Questions from every Business topic in the grade, with answers · freeFree
- Business practice questions, Grade 6Questions from every Business topic in the grade, with answers · freeFree
- The Business You BuildFree business mindset checkFree
- Entrepreneurship and critical thinking, K–8Why business thinking matters and how it is taught · freeFree
- How to teach kids to start a businessBlog guide · from idea to first sale, step by stepFree
- Lesson: Money in, money out: profitGrade 2 · full lesson with practice and a checkMembers
- Lesson: Profit, loss and keeping recordsGrade 4 · full lesson with practice and a checkMembers
- Lesson: Fixed and variable costs and profit marginGrade 6 · full lesson with practice and a checkMembers
Each word cites a page that uses it.
Sources (4)
- OpenStax, Rice University · Principles of Economics 3e, 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit · openstax.org/books/principles-economics-3e/pages/7-1-explicit-and-implicit-costs-and-accounting-and-economic-profit (checked Oct 27, 2026)
- U.S. Small Business Administration · Calculate your startup costs · sba.gov/business-guide/plan-your-business/calculate-your-startup-costs (checked Oct 27, 2026)
- Wikipedia en español · Beneficio económico · es.wikipedia.org/wiki/Beneficio_econ%C3%B3mico (checked Oct 27, 2026)
- Wikipédia em português · Lucro · pt.wikipedia.org/wiki/Lucro (checked Oct 27, 2026)
See something we should correct about “How businesses earn a profit”? Tell us.
Small businesses in America
In short: Almost all U.S. businesses, 99.9 percent, are small businesses.[1]
Facts
- 99.9 percent of U.S. businesses are small businesses.[1]6–8
- The SBA Office of Advocacy counts 36,207,130 small businesses in the United States.[1]6–8
Go deeper: for teens and grown-ups (2)
Key words in three languages
Each word cites a page that uses it.
Practice this
- Business practice questions, Grade 1Questions from every Business topic in the grade, with answers · freeFree
- The Business You BuildFree business mindset checkFree
- Entrepreneurship and critical thinking, K–8Why business thinking matters and how it is taught · freeFree
- How to teach kids to start a businessBlog guide · from idea to first sale, step by stepFree
- Lesson: What entrepreneurs doGrade 1 · free sample lessonFree
Each word cites a page that uses it.
Sources (4)
- U.S. Small Business Administration, Office of Advocacy · Frequently Asked Questions About Small Businesses 2026 · advocacy.sba.gov/2026/02/03/advocacy-releases-frequently-asked-questions-about-small-businesses-2026 (page updated Feb 3, 2026; checked Oct 27, 2026)
- U.S. Department of Labor (elaws FLSA Advisor) · When and how many hours can youth work? · webapps.dol.gov/elaws/faq/esa/flsa/028.htm (checked Oct 27, 2026)
- Wikipedia en español · Desempleo · es.wikipedia.org/wiki/Desempleo (checked Oct 27, 2026)
- Wikipédia em português · Desemprego · pt.wikipedia.org/wiki/Desemprego (checked Oct 27, 2026)
See something we should correct about “Small businesses in America”? Tell us.
How businesses raise money
In short: Businesses raise money by selling shares of ownership, by borrowing and, for some, by crowdfunding.[1][2][3]
Facts
- One way companies raise money is by selling shares of stock. Each share is a small piece of ownership.[1]Teens
- Under the SEC’s Regulation Crowdfunding, eligible companies can sell securities to many people online through crowdfunding.[2]Teens
- Small businesses can also borrow. The SBA’s main program for long-term financing is the 7(a) loan, made by approved lenders.[3]Teens
- SBA microloans are loans of $50,000 or less, made through intermediary lenders.[3]Teens
- A company can raise at most $5 million in total through these crowdfunding offerings.[2]Grown-ups
- Every crowdfunding sale must happen online through an SEC-registered go-between, and there are limits on how much most people can invest in a year.[2]Grown-ups
Key words in three languages
| English | Spanish | Portuguese |
|---|---|---|
| crowdfunding[2] | financiamiento colectivo[4] | financiamento coletivo[5] |
| loan[6] | préstamo[7] | empréstimo[8] |
| investors[9] | inversionistas[10] | investidores[11] |
Each word cites a page that uses it.
Practice this
- Business practice questions, Grade 8Questions from every Business topic in the grade, with answers · freeFree
- The Business You BuildFree business mindset checkFree
- Entrepreneurship and critical thinking, K–8Why business thinking matters and how it is taught · freeFree
- Lesson: Loans, investors and crowdfundingGrade 8 · full lesson with practice and a checkMembers
- Lesson: The investor pitchGrade 8 · full lesson with practice and a checkMembers
Members-only lessons are marked. The practice pages by grade and The Business You Build check are free.
Sources (11)
- U.S. Securities and Exchange Commission, Investor.gov · Stocks · investor.gov/introduction-investing/investing-basics/investment-products/stocks (checked Oct 27, 2026)
- U.S. Securities and Exchange Commission · Regulation Crowdfunding · sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding (checked Oct 27, 2026)
- U.S. Small Business Administration · Loans · sba.gov/funding-programs/loans (checked Oct 27, 2026)
- Wikipedia en español · Micromecenazgo · es.wikipedia.org/wiki/Micromecenazgo (checked Oct 27, 2026)
- Wikipédia em português · Financiamento coletivo · pt.wikipedia.org/wiki/Financiamento_coletivo (checked Oct 27, 2026)
- Federal Deposit Insurance Corporation, Money Smart News for Kids · What Is a Bank? · fdic.gov/resources/consumers/money-smart/money-smart-news/kids/documents/ch1.pdf (checked Oct 27, 2026)
- Consumer Financial Protection Bureau · Glossary of English-Spanish financial terms (Spanish style guide and glossary) · files.consumerfinance.gov/f/documents/cfpb_adult-fin-ed_spanish-style-guide-glossary.pdf (checked Oct 27, 2026)
- Wikipédia em português · Juro · pt.wikipedia.org/wiki/Juro (checked Oct 27, 2026)
- U.S. Securities and Exchange Commission · Mission · sec.gov/about/mission (checked Oct 27, 2026)
- Wikipedia en español · Bolsa de valores · es.wikipedia.org/wiki/Bolsa_de_valores (checked Oct 27, 2026)
- Wikipédia em português · Bolsa de valores · pt.wikipedia.org/wiki/Bolsa_de_valores (checked Oct 27, 2026)
See something we should correct about “How businesses raise money”? Tell us.
Free printables for this part
Printables that go with the topics on this page.
Every printable comes in full color and in black and white line art (low ink, ready to color in).
Questions parents ask
How do businesses make money?
Every business, big or small, tries to earn a profit.[1] Total revenue is the money a business takes in from selling its products: the price times how many it sells.[1] Total cost is what the business pays to make and sell its products.[1] Accounting profit is total revenue minus the money actually paid out: dollars brought in minus dollars paid out.[1]
How do small businesses get money to start?
Before a business opens its doors, it already has bills to pay.[2] Small businesses can also borrow. The SBA’s main program for long-term financing is the 7(a) loan, made by approved lenders.[3] SBA microloans are loans of $50,000 or less, made through intermediary lenders.[3] Under the SEC’s Regulation Crowdfunding, eligible companies can sell securities to many people online through crowdfunding.[4]
Sources for these answers (4)
- OpenStax, Rice University · Principles of Economics 3e, 7.1 Explicit and Implicit Costs, and Accounting and Economic Profit · openstax.org/books/principles-economics-3e/pages/7-1-explicit-and-implicit-costs-and-accounting-and-economic-profit (checked Oct 27, 2026)
- U.S. Small Business Administration · Calculate your startup costs · sba.gov/business-guide/plan-your-business/calculate-your-startup-costs (checked Oct 27, 2026)
- U.S. Small Business Administration · Loans · sba.gov/funding-programs/loans (checked Oct 27, 2026)
- U.S. Securities and Exchange Commission · Regulation Crowdfunding · sec.gov/resources-small-businesses/exempt-offerings/regulation-crowdfunding (checked Oct 27, 2026)