ENTR 2030 - CHAPTER 10

These flashcards cover key concepts and terminology related to different revenue models, their definitions, and other essential financial terms from the lecture notes.

Revenue Model

A key component of the business model that identifies how a company captures value and ensures revenue is higher than costs.

Unit Sales Revenue Model

Generating revenue by the number of units sold, applicable to both physical and digital goods.

Razor-and-Razor-Blade Model

A model where two products are required to function together; revenue is generated by selling one product (the razor) and recurring sales of complementary products (the blades).

Advertising Revenue Model

Generating revenue by advertising products or services; the main product is often content, and ads can be monetized for sales.

Data Revenue Model

Revenue generated by selling high-quality, exclusive information, with a direct data revenue model focusing on direct sales of data.

Intermediation Revenue Model

Generating revenue by facilitating exchanges between two parties, such as realtors charging commission fees.

Licensing Revenue Model

Generating revenue by allowing others to use protected intellectual property in exchange for royalties or fees.

Franchising Revenue Model

Generating revenue by granting another party the rights to operate under a business's name and using its established processes.

Subscription Revenue Model

Generating revenue by charging customers for continuous access to a product or service.

Professional Revenue Model

Generating revenue by providing professional services under a time and materials contract.

Utility and Usage Revenue Model

Generating revenue by charging based on how frequently goods or services are used, also known as pay-as-you-go.

Freemium Revenue Model

Generating revenue by offering a mix of free basic services and paid premium services.

Direct Cross-Subsidization

Pricing a product or service above its market value to compensate for losses incurred by offering another product for free or below market value.

Cost of Goods Sold (COGS)

Costs incurred when a sale occurs, representing the direct costs attributed to the production of goods sold.

Operating Costs

Costs associated with running a business, which are deducted from gross profit to determine operating profit.

Gross Profit

Calculated as revenue minus cost of goods sold (COGS).

Net Profit

Calculated as operating profit minus deductions such as interest and taxes.

Break Even Point

The point at which total revenue equals total costs, resulting in no net loss or gain.