Typical Revenue Models

Every business has to attract revenues from selling products and services, and every business plan has to describe how that will happen. Trying to figure out how to do that for your business idea?

One way to approach that problem is to look at common models other companies have used, and see which ones fit best. It’s all too common for a business to get latched on too strongly on one revenue model, too early, so take a look at a bunch of them before you decide. And be ready to go back to this list and make some changes if after your first few months or a year you discover things didn’t quite turn out as had planned.

What’s a Revenue Model?

Basically, it’s a mechanism or system through which a company monetizes its products or services. There are many places to go to find examples.

Here’s a recent article that describes 26 common revenue models, and how they are typically used. It’s not comprehensive but it’s a good place to start.

It describes nine primary categories:

1. Commerce and retail
2. Subscriptions and usage fees
3. Licensing
4. Auctions and bids
5. Advertising
6. Data
7. Transactions/Intermediation
8. Freemium
9. Models common in financial services industry

Find and customize the model (or models) that best fit your business and its target customers, and go from there.