Wednesday, June 12, 2013

Revenue Modeling 101...continued...to the fourth power...


The final model addressed in www.plantostart.com ‘s “Four Revenue Models and Examples for Small Businesses” is the Services Revenue model.  According to the article, the upside of this model is that it is amazingly easy (ok, maybe they didn’t say amazingly, but after looking at the other models, that seemed like the best adjective to me) to maintain because essentially, all you are maintaining is your calendar...  Services Revenue = your time.  The downsides include not being easy to grow to scale (you are just one person after all and there’s only so much time in a week), and uneven revenue cycles if lead generation isn’t maintained adequately, which involves time that you aren’t directly getting paid for so it’s pretty important to create a streamlined system for maintaining your pipeline if you want to combat uneven revenue cycles.  Note to self (and you too if you’re playing along…) research sales pipelines.

Turning to CKF, the Services Revenue model fits into the plan in terms of course offerings.  I schedule time to teach, people sign up and pay, and I teach them…Service Revenue in its most simplistic terms.  I don’t even have to bear the entire responsibility of lead generation either.  By partnering with community education programs, the classes are promoted through my channels as well as theirs.

Well, we’ve come to the end of the article so where does this leave us?  The CKF revenue model should include Recurring Revenue, Transaction Revenue and Services Revenue.  Now, to start playing around with this data to prepare for forecasting.  I’m sure there will be charts and graphs involved…I hope there are charts and graphs involved, I do love charts and graphs…

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