From idea to business idea
How the market supports my business idea
Getting ready for the market
Financing - Profit analysis
Do I need other skills?
Tools & References
Revenue Stream
Revenue stream is a form of revenue. It is considered one of the building blocks of a business model Canvas, revealing the earning a business makes from all the methods by which money comes in. A revenue stream has volatility, predictability, risk, and return. It is a way of categorizing the earnings of a company.
- Main Revenue Streams: income flows coming from the main value proposal exchange with the targeted segments of customers. Fixed costs usually have a certain periodicity and seasonality and are therefore predictable. It is important that the income flows from the base sales of the business contemplate that periodicity. If we have periods of very low or no income we can face liquidity problems in our business. These problems can be reduced from the marketing area, seasonally adjusted base sales and/or seeking complementary income that balance income and expenses. Also, although less advisable due to its cost, we can use the credit instruments to finance the circulating capital offered by the financial entities. These forecasts are made in a financial tool called the Treasury Plan.
- Accessory Revenue Streams: income flows coming from partial value exchanges, additional services incomes, or due to support from our business model other company´s business operations through rent to them our resources, capabilities, spaces or physical or logical infrastructures. They are a good source to make the indirect costs of the business impact less on profit, as they are distributed among a higher volume of sales. The key to management is that activities that generate additional income, do not increase in any way, or very little importantly, our indirect costs and direct variable costs involved are not very high, thus generating substantial additional benefit.
- Cash Flow: cash flow is an indicator in which amortizations and provisions are added to profits in each period. Why is this done? If we understand the answer to this question we will begin to realize the task ahead and the dimension of the problem. Amortizations are a cost that does not mean an exit from money. Accounting is a reduction of the result of the fiscal year, but does not imply a disbursement. The cash, the treasury is still there. The same goes for provisions. As we can begin to imagine, through cash flow we try to specify our financial resources, the cash that a company is able to generate in a given period, which is of paramount importance. It is a first indicator to know our financial health, the progress of the same, its evolution. And with it we can get to answer the doubts about if we will be able to fulfill our commitments of payments. Do we generate enough cash to meet our suppliers? And with our creditors? How will an investment impact the expected cash flow?
