4 basic revenue models

4 basic ways of generating revenues a quick overview with a simple

model

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1. get paid by the hour

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hours x fee = revenue

variability depending on numbers of declarable hours and height of the fee

Always limited by both available hours per week and the market fee level

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Examples: window cleaners, lawyers, webdesigners, consultants

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2. indirect

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number of users x value per user or user activity = revenue

the service is paid for by another than the user

the supplier has an interesting user base for a financier

a value per user or user activity

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Examples: online services (advertising), free newspapers (advertising), sales commission

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3. subscriptions

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subscriptions x fee = revenue

periodic payments (day, month, year)

products or services

continuous stream

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Examples: magazines, hosting, service level agreements, newspapers, telephony, premium linkedin etc.

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4. margins, lump sum, per usage

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price x numbers of units sold = revenue

mainly demand based

margins depend on market

high margin-low volumelow margin-high volume

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Examples: groceries, houses, watches, art, cars, projects, etc...

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the innovation is in the combination, some examples

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cars/lump sum with subscription service/connected drive

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webdesigner/paid by the hour with subscription/service level agreement

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Magazines/subscriptions with one off specials/lump sum

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Free services/indirect with subscription/premium services

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what is your new combination?who can pay for your service?

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@raymondwitvoetwww.raymondwitvoet.nl innovation consultant

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