Revenue model
A revenue model is a strategy that a business uses to generate income. It outlines how a company earns money from its products or services. Common types include selling goods, charging for services, subscriptions, advertising, or licensing fees. For example, a subscription model charges customers a regular fee for ongoing access, while a one-time sale model earns revenue per transaction. Understanding a revenue model helps businesses plan their finances and forecast growth, ensuring they have a sustainable way to make money over time.
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A revenue model is a framework that outlines how a business generates income. It details the strategies used to earn money from its products or services. Common revenue models include selling products directly, charging for subscriptions, offering advertising space, or providing services for a fee. By understanding the revenue model, businesses can plan for growth, identify potential markets, and ensure they cover costs while making a profit. Essentially, it’s the blueprint for how a company turns its activities into cash flow.