Where is the money? You can have the best business idea in the world, but if you don’t answer this question, you won’t last long!
You’ve already created your customer experience map, taking into account your target customer’s needs. Now it’s time to go through this experience again and look for revenue-generating activities; where in your customer experience would it be appropriate to insert charges or fees?
Revenue = The amount of money from all activities that a company actually receives during a specific period. It’s the “top line” or “gross income” figure from which your costs are then subtracted to figure out your net income. Basically, it’s how much you’ve earned in total, before you subtract any costs/expenses.
Net Income = Your revenue minus your costs (i.e., how much you have at the end of the day).
There are many different options for generating revenue. You don’t need to only have one money-making element in your business. What you’re looking for is appropriate “revenue streams.” Revenue streams are all the possible ways you can make money, as it relates to your ideal customer experience.
Why is identifying revenue streams important?
- It helps you think about more ways to make money.
- It helps you think about where your focus should be.
- It helps you think about how you can evolve or grow your business.
How do you do it?
Group the ways of making money into streams that are possible in the coming year and also in the future. That means you need to think about which of the items you’ve identified on your customer journey are things you can do right now, and which are better as future activities.
What are some possible revenue streams?
There are lots of different examples of revenue-generating opportunities out there (not all will apply to your business):
Pay what you can
Here are some potential revenue stream examples from the Grow-Well baby food business:
- Food sales – per product or subscription
- Sell advertising spot on Grow-Well website
- Cooking classes for parents
- Referral commission from partners
- Delivery fee
- Washing services – reusable containers
- Consultation (e.g., nutrition, meal planning)
- Sell baby-safe containers and tableware
- Rent out commercial kitchen
- Cookbooks and recipe cards
Once you’ve brainstormed where your money might come from, think about any assumptions you can make about these revenue streams and any possible related unknowns. What are the things that you still need to find out in order to know for certain how much you will charge/earn from this?
Here’s another example from the Grow-Well business, so you can get an idea of what we mean:
Doing some research on your competition and what they charge, and having a sense of what other businesses are doing to generate revenue can be very helpful.