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Revenue Drivers – Focus on the Business Insights

For your business to make money, you need to generate revenue.

You produce revenue through your usual business activity, by making sales, getting your invoices paid, or taking cash from paying customers. So, the better you are at selling your goods and bringing money into the business, the higher your revenue levels will be.

But what actually drives these revenue levels? And how do you get Insights on these drivers?

Knowing where your cash is coming from is more crucial than ever

As an FMCG Distribution company, you face the multiple challenges and a ‘new normal’ when it comes to trading, markets and buying expectations.

The better you can understand the Insights from your revenue and its drivers, the more you can flex, manage and control your ability to generate this income.

This helps your medium to long-term strategic thinking, and your decision-making, allowing you to be confident that you’re focusing on the business areas that deliver maximum revenue.

Critical areas to consider will include:

  • Revenue channels – where does your revenue actually come from? Do you create income from e-commerce, through retail sales in bricks and mortar stores, or through wholesales to other businesses? To informal traders? You may focus on just one of these channels, or it could be that you use a mixture of two, three or more.
  • Revenue streams – your total revenue will be made up of a number of different ‘streams’ So, you might be a coffee shop, whose revenue streams include coffee sales, cake and pastry sales and lunch sales. Knowing which revenue streams you rely on, which are most productive and what return they are delivering allows you to make good decisions. If 80% of your income comes from 20% of your products, perhaps you need to tighten up your product range and ditch some of the poor sellers. Perhaps you could focus more marketing in a specific niche, or downscale your sales activity in less profitable niches.
  • Products split – Do you know which products/services are the most profitable in the business? Which products have been resilient to market changes (giving you some revenue stability) and which have adapted well to change? The more you can dive into your Performance Metrics and find the most productive and adaptable products, the greater your ability is to provide constant and evolving revenue for the business.
  • Value vs Volume – Is your revenue based on selling a high volume of products at low margin, or low volume at a high margin? Based on this, can you move your margin down to create a more attractive price point (and more Customer Value)? Or are there other ways to push volume up, shifting more units and boosting total revenue? By diversifying into new channels, new streams or new products you can aim to balance value and volume to create brand new sales – and higher revenue levels.

Talk to us about Strategizing your Revenue Maximization Roadmap.

If you want to boost revenue and increase your overall profitability, come and talk to us.

We’ll review the numbers in your business, help you to understand your revenue drivers and will give you proactive Insights on enhancing your total revenue as a company.

Get in touch with me to kickstart your revenue generation by SMS on +260967924720 or email to Irfan.Sayed@cfocoach.co.zm or Visit www.cfocoach.co.zm

Check out other Valuable Insights in my articles page to help you take Action Today!