Revenue stream

A revenue stream is a source of revenue of a company or organization. A revenue stream is a source of revenue of a company or organization. In business, a revenue stream is generally made up of either recurring revenue, transaction-based revenue, project revenue, or service revenue. In government, the term revenue stream often refers to different types of taxes. Recurring revenue is revenue that is likely to continue to be generated regularly for a significant period of time. It is typically used by companies that sell subscriptions or services. It could take the form of bills paid monthly by consumers, or commercial contracts lasting several years. An example of this is monthly phone contracts. Unless the contract is broken or the customer does not pay, the phone business is guaranteed monthly revenue for the duration of the contract, often 2 years. Recurring revenue is often tracked on either a monthly basis, as monthly recurring revenue (MRR), or an annual basis, as annual recurring revenue (ARR). This number excludes all one-time, non-recurring payments; for instance, implementation or professional service fees, hardware, and discounts. These revenues based on predictable sales of goods. Revenue is earned by a transaction from a customer. A customer in a clothing store, buying a new jacket, generates a transaction based revenue. This type of revenue is often considered less attractive than the recurring model because an action is required to attract customers. These are revenues generated through one time projects. Companies that rely entirely or largely need to invest a lot of effort into maintaining customer relationships. In this type of model, revenue is hard to predict, because it is hard to know what lies further down the road. This revenue model sells the time of oneself or of a company's employees. The service revenue model is often used in combination with one of the other models. An example of service based model are consulting firms. The offer their advice and commonly charge per hour. The Business Model Canvas lists 7 ways of generating revenue: asset sales, usage fees, subscription fees, lending/leasing/renting, licensing, brokerage fees, and advertising. An asset sale is completed, when the buyer acquires the assets dropped by a company. An example of an asset sale is when a shoe store sells a pair of shoes to a customer. By doing this, the shoe shop sells the ownership rights to the buyer, giving him complete freedom over what to do with the pair of shoes. This type of revenue belongs to the transaction based revenue.