Revenue streams are the amount of money that a company generates from customers. In the case of Social Enterprise, revenue streams are referred to the income which will be provided in activities related to the social mission.
Ιn social enterprises revenue streams are a huge part which needs consideration in order to ensure the sustainability of the enterprise from the generated revenue as a typical enterprise. On the other hand, social impact is supposed to be delivered, which is the reason that is called social enterprise. The connection between the revenue and the way that is used, defines if an enterprise is social or not and this can happen only by providing revenue to activities which support the social mission. For instance, by paying the salary of the employees of a social supermarket who belong to vulnerable social groups.
Asset Sale: This is probably the most widely understood revenue stream. Ownership rights of a physical product are sold in a price agreed from both sides. Examples include, Amazon selling books, Apple selling phones, and Boeing selling airplanes.
Usage Fee: In this type of revenue, the customer pays for using services provided by the company. Usually, the amount of fee depends on the frequency of the use. For instance, hotels charge depending on overnights, or a car hire services charges for the days of car usage.
Subscription Fee: With this revenue stream the customer pays a regular subscription for continued use of a service. For example, Sky Television in the UK charges a monthly fee for access to its channels, and gyms charge a monthly subscription for access to their facilities.
Brokerage Fee: Interested parties (for a specific purpose) are met by an intermediary. For example, real estate agents work for selling or renting buildings by helping sellers and buyers to cover their needs. Once a property has been successfully sold then the seller will pay the real estate agent a small percentage of the sale price for successfully brokering the sale.
Lending/Renting/Leasing: In this case the customer has the right to use the company’s product for a specific period of time. At the end of the agreed period of time the asset must be returned to the company. For example, the owner of a house rents his apartment for three years. The leaseholder has the right to use the apartment as owner for three years (by giving the proportional and agreed amount of money), but by the end of the agreed period, the right is returned to the owner.
Advertising Fee: All kinds of media such as television, online platforms, newspapers, blogs etc. are paid for advertising a product or service that the customer asks. In return they receive the advertising fee.
Questions to be answered about revenue streams in a social enterprise:
In which way can we separate the revenues which are coming from commercial activities from those who come from impact activities?
Have we checked all the possible revenue resources from commercial activities, which will help us remain sustainable and increase the level of the social impact?
