Lesson Overview

For any start-up, revenue is the fuel that keeps the engine running.
Your financial plan must fit your unique business. Over the course of this programme, you have already refined your product-marketing strategy, finalised your target market, customer segments as well as defined your sales and operations strategy. In this lesson, you’ll learn how to identify all possible revenue streams, assess their potential, and create simple projections to guide your business decisions.

Learning Objectives

By the end of this lesson, you will be able to:

• Define revenue and recognise different types of revenue streams.
• Identify and categorise all current and potential sources of income.
• Understand the difference between one-off and recurring revenue.
• Apply three methods of revenue projection: base, growth, and scenario projections.

1. What is Revenue?
Revenue is all the money your business earns from sales and other income sources before any costs are deducted.
In simple terms: it’s the money coming in.

2. What is a Revenue Stream?
A revenue stream is a specific source of income for your business.
The most resilient startups don’t rely on just one — they diversify.
Common Revenue Streams for Startups:

• Sale of products – physical or digital goods.
• Sale of services – consulting, design, cleaning, etc.
• Subscription / membership fees – regular payments for ongoing access or benefits.
• Grants or awards – non-repayable funding from government, charities, or competitions.
• Sponsorships / partnerships – funds in exchange for brand exposure or collaboration.
• Training & workshops – monetising expertise.
• Licensing & royalties – allowing others to use your intellectual property for a fee.

3. One-off vs. Recurring Revenue
Understanding the type of revenue helps you forecast stability.

• One-off – A single sale or payment with no guaranteed repeat business.
Example: Selling a custom wedding cake.
• Recurring – Predictable, ongoing income.
Example: Monthly membership fees at a co-working space.

4. Evaluating Your Revenue Streams
For each revenue stream ask the following questions:

1. Who is paying me? (target customer segment)
2. How do they pay? (method & terms)
3. How often do they pay?
4. How much does it bring in each month/year?
5. Is it growing, stable, or declining?

Example – Digital Marketing Agency:

5. Methods of Projecting Revenue
Once you know your streams, you can forecast future income.

a) Base Projection

• Multiply your current monthly income by 12 to get an annual figure.
• Useful for a steady, no-growth scenario.

Example:


Current monthly income: £4,000


Base projection = £4,000 × 12 = £48,000/year.

b) Growth Projection

Factor in realistic increases based on planned actions (e.g., marketing campaigns, new hires, additional product lines).

Example:


Current monthly income: £4,000


Planned growth: +10% after marketing push.


New monthly income = £4,400


Annual projection = (£4,000 × 6 months) + (£4,400 × 6 months) = £50,400/year.

c) Scenario Projection

• Create best-case, expected, and worst-case estimates.
• Helps prepare for uncertainty.

Example – Event Catering Business:

• Best-case: £8,000/month during peak season, £5,000/month off-season = £78,000/year.
• Expected: £7,000/month peak, £4,000/month off-season = £66,000/year.
• Worst-case: £5,000/month peak, £3,000/month off-season = £48,000/year.