Revenue streams

Lesson Details:

Video Transcription: In this video let's start going over the revenue streams which is the perfect segue from our customers how we reach them and how we build our relationships with them and it's going to complete the and it's going to complete the right side of the business model canvas so congratulations we're gonna be more than half done so let's look at the revenue streams that are possible and how to structure it first research your current market you're gonna be in some market what are the incumbent existing companies charging what is the range of the prices that's going to immediately give you a sense of how you should price your product and what kind of offerings there can potentially be what's effective you're gonna get clues immediately from the current market early on and with some exceptions but generally speaking cuz it's your new there's no trust there's no branding there's no recognition you've got a price low and the low price will get you those initial clients and they're going to give you the social proof the reviews online all those things and you can raise your price over time as your quality goes up and as your experience goes up and of course cheaper paying customers very often they're actually more demanding ironically they want more they you know because that money actually is worth more to them sometimes because they're usually on the lower and bracket of potential spending they're usually lower just lower and customers they can spend less so they need more for that money eventually it will be good to serve a higher demographic of your customers but if generally the way to get ahead and the way to make some momentum is to price low and there's a common question of how many revenue streams sure the company have usually companies have multiple revenue streams but there tends to be one that is extremely winning for example a company can sell branded t-shirts with logos.

Okay that that might make up like less than one percent of their overall revenue sure it's a revenue stream but it's a nearly negligible one so you can sell extra things upsells but usually there's something cool that sells well and you structure everything around it so that you sell more of that thing and naturally more of your marketing will be centered around drawing that once revenue stream and that revenue stream will further cement itself as the winning one because you overtime gonna structure a lot about how your company is run to boost that revenue stream when you're early though it's okay to experiment because you sometimes don't exactly know what your revenue stream might be obviously if you're in a common business let's say you're in a cleaning service or a lawn care service well you know what that revenue will be but let's say you're a company like a new app or something like that or some kind of innovative technology product you don't really know it's a lot of experimentation or if you're a freelancer you don't know if you're gonna sell more of like certain service or another service or another service so you just have to experiment experiment experiment until something's really starts clicking for you so in the beginning experimentation is not a problem but eventually you want to end up in a few revenue streams that you've tried and one that is really working that's the typically good recipe now let's talk about fee structures and similar topic the easiest way to generate revenue is through ads or promoting other companies or by getting sponsored like right now a very popular thing is to create an Instagram account and try to get sponsors or you can also put ads on your site or anywhere else if you have a website you can go to google.com slash Adsense and sign up for their ads program and you can put their ads on your site like literally on day one probably but those typically aren't amazing at being effective at giving you a high high rate of monetization something that works better are transactional or subscription models transactional typically has to do with commerce or e-commerce when you're selling things or services you get paid typically a more substantial amount per transaction.

So the money comes right away as well a more rare but still somewhat common fee structures are licensing content or products or charging per use and what you want to look at is customer segments the see for example many of the same food products that are sold in the United States when they get sold in Europe or in other continents they are sold in different packages with different prices so that's a good example of price dependency on customer segments different segments in different countries can't afford different rates and like different things so even for that same food example the recipe sometimes changes so depending on how your customers find you and come in to your business you can give them different prices and lastly other pricing structures that are also possible are real time markets for example if you run ads if you bid on AdWords ads on Google you'll get different prices at different times of the day for your ads so it's a way to have a real time market for bidding that's possible something like eBay that's also possible auction type sites or if you negotiate fees like when you buy a car you can negotiate your car fee you can't bring the price down by 90% but you can negotiate within like a 10% range for example probably so some negotiation sometimes is expected and you have to let customers know that it's okay but if they don't negotiate and pay a higher rate that's also great for you if you run the business so these are general ways to structure your fees and some examples for those structures and for whatever your business is whatever your products or services you should have a good idea of how to structure your fees in the beginning and as your company matures.