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Show Me the Money. QUICK START REVENUE MODEL. WORKSHOP INCLUDES: Overview of Revenue Model Ways to Validate Revenue Model Profit & Loss Template Example. REVENUE MODEL. An understanding of your costs & opportunity for revenue is VERY important for your business model.
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Show Me the Money
QUICK START REVENUE MODEL WORKSHOP INCLUDES: Overview of Revenue Model Ways to Validate Revenue Model Profit & Loss Template Example
REVENUE MODEL An understanding of your costs & opportunity for revenue is VERY important for your business model. This understanding will allow you to financial projection and have an accurate understanding of your CAPITAL NEEDS.
REVENUE MODEL What is your hypothesis regarding how much you will charge for your product? - This is the starting point for considering your opportunities for revenue.
VALIDATION Please keep in mind -- until your revenue model is VALIDATED- it’s a hypothesis. You can use a simple tool to help you validate your price point with your customers… A matrix that identifies: • How likely is this person to buy this product? • How much would they spend?
TOOL Would you buy this product for yourself or someone else? How much would you pay for it? Very Likely Likelihood to Buy Not Likely $0 $10 $20 $30 (Use appropriate scale) How Much? (Cost of Product)
P & L HOWEVER – You must understand how much it COSTS to create your product. This can include: • Costs of Goods or Elements of Service • Cost of Packaging/Dissemination • Costs of User Acquisition & Conversion • Cost of Customer Acquisition WARNING! You don’t want to lose money. This happens when it COSTS more to create/disseminate you product than what you are CHARGING.
P & L Keep in mind that there are other kinds of costs to running a business. These costs can include: • Salaries • Rent • Fuel/Travel • Insurance • Equipment • Marketing
P & L Let’s take a few minutes to consider: • Product/Service Price Point • Costs of Product/Service • Extraneous Costs QUESTION: What do you need to change (pivot) about your concept to be profitable?