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Handout 4 PDF

For startups, revenue often grows quickly as new customers are added, as seen with companies like bKash and Pathao. For established companies, revenue growth is more difficult and usually only occurs through mergers and acquisitions. There are two main types of revenue: transaction revenue which occurs at the point of sale, like buying food at KFC; and recurring revenue which occurs multiple times through ongoing services or support, like an internet connection. Different revenue streams include usage fees, subscription fees, licensing fees, brokerage fees, and advertising fees.

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Sheikh Golam Zillani
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39 views1 page

Handout 4 PDF

For startups, revenue often grows quickly as new customers are added, as seen with companies like bKash and Pathao. For established companies, revenue growth is more difficult and usually only occurs through mergers and acquisitions. There are two main types of revenue: transaction revenue which occurs at the point of sale, like buying food at KFC; and recurring revenue which occurs multiple times through ongoing services or support, like an internet connection. Different revenue streams include usage fees, subscription fees, licensing fees, brokerage fees, and advertising fees.

Uploaded by

Sheikh Golam Zillani
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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BUS 305 Handout 4 Spring 2019

Revenue Streams

Revenue is also known as sales, or “topline”. because it is the top line on the income statement.
If a business does not generate revenue, it cannot function.

For a start-up or a young company, revenues may grow very quickly, as it adds new customers. Examples:
bKash, Pathao.

For older or established companies, revenue growth is more difficult. Often it is only possible through
mergers and acquisitions (buying other companies). Examples: Coca-Cola buying bottled water company
Glaceau in 2007, or Pepsi buying Quaker Oats Company in 2001.

1 Two main types of revenue

There are several ways to generate revenue streams. They belong to one of 2 broad categories.

Type of revenue Purpose Example


Transaction revenue Revenue that occurs once, at point of Eating a meal at KFC
sale. Buying a shirt at Ecstasy

Recurring revenue Revenue that occurs more than once, Internet connection from
from providing ongoing service or Link3
customer support. Car dealer service

2 Different ways to generate revenue (revenue streams)

Revenue stream Description Example


Asset sale Sell ownership rights to a physical product Shirt bought at
Yellow
Usage fee Charge fee for each use of a service Package delivery
Subscription fee Charge for continuous access to a service Gym membership
Lending/Renting/Leasing Charge for the right to use an asset for a fixed Car rental
time period
Licensing Give permission to use intellectual property in Bangladesh Idol
exchange for a fee
Brokerage fees Charge a fee for mediating (brokering) service Real estate broker
between buyer and seller
Advertising Charge fee for advertising a company’s Billboard
product

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