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