What Is Revenue Streams In Business Model Canvas? How To Do?

Have you ever heard about revenue streams in business model canvas? If not, you might be curious about what is revenue streams in business model canvas. So, revenue streams business models are the several sources for your business to earn money by selling your business product or service. Do you want to know more about revenue streams and the types? Let’s check this article out to get more information about it!

What Are Revenue Streams In Business Model Canvas?

What are revenue streams in business model canvas? So, revenue streams business model are the several sources for your business to earn money by selling your business product or service. There is also a revenue business type which depends on the business activities and products. The retail business revenue accounts are diverse compared to businesses that provide services.

Types Of Revenues

There are types of revenue streams business model canvas which is operating revenues and non operating revenues. The operating revenues show the amount earned by the company business operation. Operating revenue streams canvas example is the sales of goods and services. While the non-operating revenues referring to the money earned from another business’s side activities like interest and dividend revenue.

Software business model canvas also using the revenue accounts for their business. Here are several common revenue accounts, such as:

• Revenue from goods sales or service fees – This is the main operating revenue account for most businesses.
• Interest revenue – The non operating revenue that helps to  record the interest earned on investments such as debt securities. 
• Rent revenue – The non operating revenue that records the amount earned from renting out buildings or other equipment that are used for business. 
• Dividend revenue – The amount of profits that earn from holding stocks of other companies. 

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Examples Of Revenue Streams

The business revenue streams categorize the business earning from a certain pricing mechanism. To understand it better, here are the revenue streams – business model canvas example for you.

• Transaction-based revenue which is used to proceed sales of goods from one-time customer payments.
• Service revenue are the revenues that are generated by providing service to customers and calculated based on time.
• Project revenue earns the revenues through one-time projects with customers.
• Recurring revenue earns revenue from the ongoing payments to continuing service. The recurring revenue streams include: Subscription fees, licensing content to third parties, renting, leasing, or lending assets, brokerage fees and advertising fees

Importance Of Revenue Streams

Business model canvas revenue streams explained that revenue is used as KPI or Key Performance Indicator for all businesses. The business revenue number reflects how much money that company generated from selling their products and services.

Usually the financial analyst is the one who keeps checking the business revenue. By keeping analyzing and understanding the revenue stream, it can help the business owner to understand the business cash flows. Beside that, it also helps to observe the unusual movement or changes in the revenue cost and identify why it happens.

The performance prediction differs between the four revenue streams and out of the four revenue streams, recurring revenue is the most predictable income to a business because the cash inflow remains consistent with a stable customer base. While the transaction-based and service revenues are difficult to predict because they fluctuate with customer demand. 

Tips To Develop Your Revenue Model

As mentioned before, revenue stream is the building block that presents how much money that a company generates from each Customer Segment. Every business needs at least one great revenue stream to earn money. The business revenue streams can be generated in many different ways and you can mix them to get a higher revenue. Here are the revenue stream examples to help you develop your revenue model.

• Sale of physical product: The customer pays in cash for the product and the customer is then free to do whatever she or he wants with the products.
• Usage fee: The customer pays a user fee for a particular service that they use. The amount fee paid depends on how much of the service is being used.
• Subscription fee: The annual fee that customers need to pay before can use the service, for example, once a month, or yearly, for a particular service like gym. You still have to pay the annual fee even if you don’t come regularly.
• Lending/renting/leasing: The fee that someone needs to pay to grant a right to use a product or service in a fixed period. This method is usually used for car or machinery rentals.
• Brokerage fees: Your company will get its revenue from an intermediate service. This method is often used by real estate agents and credit card providers.
• Advertising: a fee that a business may charge for advertising a product, service or brand. 
• Volume and unit selling: a fixed fee that you need to pay for a product. But if the customer chooses to buy your product in big quantities, they could get a discount. You can offer different prices and discounts for different Customer Segments. 

Read also: 15 Small Online Business Ideas with Small Budget to Start

Conclusion

Revenue streams business models are the several sources for your business to earn money by selling your business product or service. Revenue business type depends on the idea of business activities and products.

There are two types of revenue streams: business model canvas which is operating revenues and non operating revenues. The operating revenues show the amount earned by the company business operation. While the non-operating revenues referring to the money earned from another business’s side activities

For a business based on the revenue stream, it is important for a business analyst to keep monitoring and track the latest project opportunities and keep modifying the forecast model to produce an accurate forecast revenue. To help you attract your customer, you can offer a free shipping voucher or other promotions. You can also advertise your business in social media marketing and see how your business is increased.

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