Revenue streams

I find that the easiest way to start is with revenue streams. Your interview subjects know where the revenue comes from, and it’s also easily discovered by taking a look at the received payments on the bank account.

Here’s an example of my notes from exploring my own revenue generation as an independent contractor:

To generate revenue, I must receive payments. To receive payments, I must send invoices. To send invoices, I need to deliver billable hours. And so on.

Of course, it’s possible unravel the entire enterprise architecture from the need to generate revenue. For example, the need to keep a ledger leads to the need for a computer, but a computer will probably turn out to be a key resource when I get to that area of the business model canvas, so I save that for later.

What if we’re not looking at my little one-man shop, but at a non-profit rights management society? It turns out that mind map looks surprisingly similar! Only Register delivered hours and Deliver billable hours are replaced by Receive usage specifications, Charge administration fees, and Distribute earned fees. But the other business functions are the same, which is also why many different businesses may have quite similar capability maps. Their information models will probably look more dissimilar as will their processes.

So far, I suspect that these first business functions will fit within two capabilities:

  • Consultancy services
  • Finance

And I see some key information entities already:

  • Company (provides details for invoices and external registries)
  • Bank account transaction (received payments)
  • Delivered hours
  • Invoice
  • Customer (to send the invoice to)
  • Contract (sets terms and details for invoicing)
  • Bookkeeping transaction (booking the invoice in the ledger)
  • Ledger (holds bookkeeping transactions)

As with capabilities, most of these information entities would also work for the non-profit society. Delivered hours would be replaced by Rights usage specifications.