COST STRUCTURE & REVENUE STEAMS

A business principle that is commonly used is the 80-20 rule. It divides all tasks in an organization into a couple of categories: vital and non-vital. Examples of vital tasks are product development, production, and customer service, while examples of non-vital tasks are advertisement, accounting, renting a warehouse, or administrative staff. According to this rule, about 20% of your resources (people, money, and time) should go to vital activities.

Cost structure analysis of a company is the breakup of expenses incurred by the company. It also serves as a tool for decision-making by stating how much should be spent on what. The cost structure is one of the most important items of financial management that a successful business needs to consider. The revenue stream is sort of synonymous with Cost structure, which is a way to show the methods and sources through which companies get income to run their operations. Together, they show how the company is earning money.

Cost structure and revenue streams can vary a lot depending on the industry but there are a number of common elements that form the basis for most cost structures. To get your costs organized and provide an understanding of how your costs are related to turnover, you need to use a standardized approach to recording costs. A key metric for every business is its cost structure. This will help you understand how profitable a company is, and whether it is making or losing money. The rule of thumb is to never overspend on costs. It's better to keep the costs manageable while focusing on maximizing profit margins. Once you have figured out your cost structure, the next step is to understand how you can increase your revenue streams by coming up with new products, and finding new markets. As your business grows, it is important to track your complete money flow and know where you can save money. First, we will break down the cost of hosting and how to get the best deal for your business. Next, we will break down how you can make more revenue when generating traffic.

With regards to Cost structure, We expect the largest cost of operating any business to be its infrastructure, namely the development of the website and the training of its staff. The former will require a significant investment in order to build a site with sufficient functionality and security. The latter will likewise necessitate significant expenditures. Additionally, the process of conducting training will itself have costs associated with it. Also, a part of the cost structure is that of employees, including their salaries, benefits, and bonuses. Finally, it is important to consider marketing costs; these are likely to be significant in order to reach sufficient scale quickly and consider miscellaneous costs such as taxes and insurance.

Revenue Streams on the other hand can come from subscription fees for our services which is expected to major part the of annual income. Basically, Cost structure is the expenses incurred by a company to generate revenue. Revenue streams are the sources from which a company earns cash. We have found that the most successful companies are those that understand how their cost structures and revenue streams work together.

In conclusion, it is important to be able to generate multiple streams of income so as to be able to find a balance with the cost structure of the business. Also, it is important to note that additional services keep these streams diversified and stable and increase the chances of profit