Part 3 : REVENUE STREAMS
In our continuing series, we’re considering the need to re-evaluate your business model coming out of the COVID-19 pandemic. Companies across the globe had to pivot quickly in March of 2020. Re-assessing your business model should really be done annually, but most never do. However, a crisis like COVID can force your hand.
As we work through various aspects of a traditional business model structure, the challenge is to look for opportunities to improve profits, innovate, pivot, evaluate your competition post-crisis, review your value proposition, and consider your key resources.
In this segment, we’ll look at REVENUE STREAMS.
Revenue is all about bringing money in to the business, which is essential for profitability. That said, we all know that revenue doesn’t guarantee profits. That’s a topic for another article in the series. For now, let’s just work with the assumption that the more revenue you can drive through your business model, the higher your chances of profitability become.
The COVID crisis was a stark reminder of the importance of revenue for many businesses. If you have a single source of revenue in your business, let’s be clear … your business is at risk. If there’s ever an interruption in that revenue stream, whether it be from a global pandemic, legislative changes, or market innovations, you will be out of business.
This is why it’s so essential to look at your business model every year. What changes can you make in revenue streams for the company as a result of changes in technology, buyer behavior, legislative changes, or innovations?
What secondary revenue streams can you add that may not not have existed below?
Some questions to ask as you work through the process:
- What is your current primary revenue stream?
- Was it impacted during the pandemic? If yes, how so?
- What changes need to be made on a permanent basis to protect or insulate that revenue stream from future crisis?
- Do you have secondary revenue streams? (If not, make this priority one)
- Did the pandemic reveal opportunity for new secondary revenue streams?
- How might you integrate a subscription model into your revenue stream?
That last point in that list is an important one, and one that stumps business owners in multiple industries. But the fact is, just about every type of business has the ability to implement a subscription model into their revenue stream. With just a little ingenuity and marketing, you can quickly make your business more recession and crisis-proof by adding predictable recurring revenue. The added benefit is that this ultimately makes your company more attractive to future investors or buyers.
It’s extremely likely you experienced major shifts in revenue over the last 6-months as a result of the COVID-19 crisis. The question now is, “what did you learn from it?” Once you evaluate what the impact was on revenue and exactly why it happened, you are positioned to make decisions to reduce or eliminate that risk going forward.
As you work through the exercise of re-assessing your REVENUE STREAMS, start with what you had. Then think about how you had to pivot to survive. What new possibilities and insights did the COVID19 crisis introduce as potential revenue streams for your business. Lastly, consider what potential subscription model you could introduce to further insulate your cash flow as well as increase the value of your company.
If you’re ready to take your business and leadership skills to the next level, and if you think your business could benefit from more insights like what’s offered in this article, let’s start a conversation. LXCouncil may be the perfect next step!