Your business revenue model represents how your company makes money and is a key component of your overall business model. Your revenue model represents the products or services you sell in exchange for money, and your business can have multiple revenue streams. For example, Apple doesn’t just sell hardware (iPhones, iPads, etc.); they also sell digital products, like apps in the App Store or cloud storage space. They also sell products online and in their stores. These are all examples of different revenue streams.
It’s important to evaluate a few different areas when you’re thinking about your revenue model:
Value Proposition: What is the value you provide that will make your customer purchase from your business versus another business?
Customer Satisfaction: Great customer service and addons or services that provide value will keep your customers around, which increases your revenue.
Marketing: How and where and to whom you market your business to will work to increase your revenue, if done correctly. Watch out for high marketing spend that doesn’t return on your investment, however. It’s good to test small and grow into additional marketing channels as your revenue allows.
New Revenue Approaches: What are new ways you can sell your product and create additional revenue streams? Businesses that find new niche markets or expand into other possible revenue streams will consistently have a healthy profit.
Effective Pricing: How you price your products will matter to your revenue stream.