Profit potential is a phrase commonly used in the world of economics and business to describe the potential for a product or idea to make money. Profit potential is sometimes also referred to as income potential. This term is not a guarantee of earnings but rather an indicator of what the projected return on investment might be. Because of the liquid nature of the concept, this term is widely used in business and investment literature, often as a marketing ploy.
To determine profit or income potential, a lot of factors are taken into account. This computation is sometimes called a risk versus profit assessment. What this assessment does is note the costs and risks that are associated with the production and sales for a product or business. It then weighs the outgoing expenses against the estimated revenue from sales projections to decide if the product will bring in a profit, and if it will be high enough to make the product cost effective.