Business Tips

Sources of Revenue for an e-Business

Depending on the business model, several revenue sources may be available to an e-business. Many online businesses will have three or four of these sources.

Sources of Revenue for an e-Business

A mix of revenue sources is often referred to ad a revenue model but may be mistakenly called a business model. Some of these sources of revenue are:

  • Advertising
  • Affiliation
  • Agent commissions
  • Licensing
  • Sales commissions
  • Sales profit
  • Sponsorship
  • Syndication
  • Use fees.

For large public – private or government projects revenue sources might also include:

  • Bonds, usually for large capital expenditures
  • Taxes, primarily income, property and Sales taxes
  • Use fees and tolls.

With small fast-growing companies such as e-Business startups, investors often track expected revenues and revenue growth and may make changes to increase revenue.

However, other traditional measures such as cash flow and earnings could also be used as means of evaluation.

Recommended: How To Calm Angry Clients And Convince Them To Keep Patronising Your Goods/Services

Activities, Resources and Capabilities

The activities, resources and Capabilities of a business are sometimes known as its requirements.

In order to perform the activities required to carry out the mission of the business, certain resources are needed, for example, employees with certain skills, or capabilities are needed to perform activities correctly and efficiently.

Also, inventions processes and other intellectual property may add to the individual knowledge of an employee to develop a competence in the performance of the required activities.

Activities

Activities are specific business processes or group of processes such as design, production and sales that implement the business concept. The operational business model identifies the costs and outputs of each activity.

Activities drive the need of resources. Existing activities should be carefully scrutinized in order to conserve resources and reduce costs. Activities left over previous initiatives, but not currently necessary should be curtailed.

This may sound elementary but businesses start many activities over time, especially if its business concept changes. But one doesn’t often hear of a large business curtailing it’s activities in order to focus on its current mission.

See Also: 7 Simple Ways To Make Money From WhatsApp

Resources

In order to perform activities, an organisation requires human, tangible,  intangible and supporting resources. Human resources in particular,  the skill and knowledge of employees are important as are the programs (e.g incentives, training) and institutions that support them.

Tangible or physical and financial resources include facilities, equipment, and cash reserves. Intangible resources include intellectual property, business processes that can be patented, brands, customer profiles and personalization data in databases,  and customized software.

Supporting systems include organizational structure, information systems or communications processes that may have little value as stand-alone resources.

Capacity

The total resources of the organisation represent its capacity. When resources are underutilized, the company has resources that are not used or idle capacity.

Idle capacity in manufacturing tends to be measured in terms of additional output that could be produced. In service organizations, the measure for idle capacity is usually a number of employees.

Resource capacity can also measured in job-hours, machine-hours, sales per employee,  or square feet. Often these are compared with industry standards to assess the efficiency of the organisation.

Resources may also misallocate. Processes may be successively introduced over time that results in an overall inefficiency.

This may be a significant potential problem in e-Business since activities are accumulated based on market demand and there are few if any other companies available for a comparison.

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