No business can sustain itself without generating adequate revenues. According to Mullins & Komisar( “Getting to Plan B” Harvard Business Press, 2009) a few key questions need to be addressed while assessing revenue model risk:
§ Who will buy?
§ What will they buy?
§ What pain is the business resolving for the customers?
§ In what way is the business delighting the customers?
§ How soon, how often and how much (many) will customers buy?
§ What is the price the customers are prepared to pay?
If a business is not solving a customer problem or adding to customer delight, revenues will be difficult to sustain. Revenue projections must be made carefully. The business forecast must be compared with that of comparable companies. Assumptions must be validated by building hypotheses and testing them using all available data.
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