David Weedmark reports:
"A business revenue model answers the most important question about a new business: How will you make money? When you are first starting out, this may feel like a guessing game. However, the experience you have accumulated and the study of more established businesses can give you a wealth of information to begin your own revenue model. Once you begin bringing in money, use the revenue model as a living document to change your strategies, focusing on sources of income that work best, while revising your approach to those that aren't working well...Gather your sales data if your business has already produced some income. Make a note of each type of income source and an estimate of the total revenue. If you have not yet launched your business, but worked in the same market for someone else in the past, make notes of the revenue sources your company had. The more sales history you have, the more accurate your revenue model will be...Determine how many customers exist for your products or services by doing some market research. You can research this yourself using resources such as the most current Economic Census or by hiring a market research consultant...Make a list of primary revenue models you can use. For example, you can sell products and services on a project-by-project basis. You can also charge a retainer to organizations that may need your services, such as lawyers and public relations firms do. You may also be able to offer services on a subscription basis...Make a list of secondary revenue models you can use. For example, if you promote your business on your website, you may be able to add to your revenue by selling affiliate products related to your core business. You may also be able to make additional money by putting advertisements on your website. In addition, you may be able to charge a monthly fee for premium content on your website or license your content to other websites...Make a list of other marketing methods used by other businesses...Launch word processing software and create a new document for your revenue model or add it as a new section in your business plan...Write down a second list of long-term revenue sources. These may eventually bring in a lot of income but are not enough themselves to sustain your business today. These may be secondary income sources such as website advertising or subscription-based services...Create a new page for each revenue source and use the revenue source as the title for that page. Detail the steps you need to take to achieve the revenue goal you specified in the summary page. Specify how much time each will require to implement, as well as how much time will be required to keep it active...Review your revenue model on a regular basis and adjust it as needed. If your business is just starting, you will have a much stronger understanding of your revenue after a month than you will before you began. Increase the amount of time you spend on the revenue sources that work well. Decrease the time you spend on revenue sources that are not working as well as you projected until you can revise your strategies for them."
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