For leaders hoping to grow their businesses, especially businesses at or approaching the enterprise level, there is a point where developing and adding revenue streams becomes central to staying agile and competitive in your market. Once you’ve achieved a strong product-market fit for your core offering, your goals around growth diverge into two parallel directions: further refining and growing your business around your original scope of products and services and looking for viable opportunities to launch new businesses and services.

There is a creative element to this aspect of business development: Creating new revenue streams requires imagining a variety of different directions for your business, analysing which direction is strategically best for your company’s unique needs and continually testing those assumptions and decisions. In this article, you will find an overview of a strategic approach to revenue streams for enterprise businesses, including ideas for generating a diversity of revenue streams and strategies to help you identify and invest in those that are best suited to your business.

What's in this article?

• What are revenue streams?
  
• Why generating new revenue streams is beneficial
  
• How to imagine new revenue streams
  
• Strategies to create new revenue streams
  
  • Embed financial services
    
  • Explore possible new business models
    
  • Create a billing strategy to support new revenue streams
    
  • Consider becoming a marketplace or platform
    
  • Scope out expansion into new markets
    
  • Set up a global payments infrastructure
    

What are revenue streams?

For some businesses, each asset that they sell creates a single revenue stream, but this is not always the case. One asset could be used to create multiple revenue streams. For example, if your company sells software, you might sell directly to individual consumers and offer a white-label version for companies. A revenue stream isn’t what your business sells but rather how you make money. There is no hard limit to the number of revenue streams that your business can have, and finding ways to diversify revenue streams is a top priority for many businesses as they look to grow.

Why generating new revenue streams is beneficial

Focusing on strategy for your business’s revenue streams is about more than simply making or increasing revenue, it’s also about risk. Finding success in a single revenue stream is not a problem in itself. But over time, reliance on one revenue stream poses a risk. If business in the single revenue stream dries up, you’ll be left with no backup. Think of it like investing: Diversification is generally considered safer and more sustainable than investing in only one type of stock.

When developing a plan to grow your business, it’s helpful to think about how to diversify your company’s offerings. With a robust set of offerings and therefore revenue streams, you will have several different paths to sustainable growth, even in the event that one revenue stream suffers or decreases. Diversifying revenue streams helps to insulate your business against the uncertainty of a recession, especially if one of your lines of revenue is countercyclical.

How to imagine new revenue streams

The process of imagining a new revenue stream requires taking a step back from day-to-day operations and examining your business from a bird’s-eye view. It helps to begin this process by brainstorming without being too restrictive about what is and is not possible. Start with the goal of considering a wide breadth of options for your business.

Enterprise decision makers should think like small business owners – go back to basics and consider, "If I were to start this business today, what new business opportunities would I pursue based on the market size and fit?" The United States Small Business Administration (SBA) provides a number of useful resources along those lines, including guided questions to consider when trying to determine and understand your market, which are applicable not just in the US. Although these questions were put out by the SBA, which focuses on serving small businesses, thought exercises around new revenue streams are an important "back-to-basics" opportunity for enterprise businesses. These questions provide a way to identify the markets available to your business and which revenue streams might make the most sense for you to pursue. Examples of questions to ask include:

• Demand: Is there a desire for your product or service?
  
• Market size: How many people would be interested in your offering?
  
• Economic indicators: What is the income range and employment rate?
  
• Location: Where do your customers live and where can your business reach?
  
• Market saturation: How many similar options are already available to consumers?
  
• Pricing: What do potential customers pay for these alternatives?
  

Questions like these are helpful starting points for assessing a specific market, as well as the viability of a particular revenue stream for your company.

Equally important to assessing potential areas for growth is understanding the options that you already have based on the assets that you currently hold. There is a wide range of revenue streams that you can consider, including subscriptions, licensing, product sales, services or consulting, brokerage fees, usage fees, advertising, and leasing or renting.

Strategies to create new revenue streams

Here are strategies that you can consider as you work to generate new revenue streams to grow your business.

Embed financial services

A growing option when it comes to pursuing new revenue streams is embedded finance. In recent years, the proliferation of tools that offer banking-as-a-service (BaaS) has made it possible for companies of all kinds to offer services that, traditionally, a bank would offer, such as issuing cards, providing monetary accounts or directly offering a loan. These services not only offer a way to expand your business with relatively little operational overhead, but they also provide an opportunity to monetise the economic activity of your platform.

There are a variety of financial services that you can offer. Take issuing cards, for example. By using a solution like Stripe Issuing, your business could quickly launch and manage a commercial card programme. Every time a cardholder makes a purchase with a card issued through your card programme, you can earn money by keeping a portion of interchange revenue (a cost that accompanies every card transaction). This guide goes deeper into how card issuing generates revenue for businesses.

The same is true when your business offers loans. With many businesses in need of financing, the ability to offer competitive loans can open up your business to a new clientele. Tools like Stripe Capital make that process easy by allowing you to offer a complete lending programme through a single integration. For marketplaces or platforms, Stripe Treasury’s API makes it simple to embed financial services with a single integration.

As BaaS tools evolve, considering which tools could be right for your business is one way to keep an eye on potential new revenue streams for your company. Tailored support from Stripe’s suite of enterprise solutions can help power businesses to access and optimise all available revenue streams and drive continual growth. To learn more, go here.

Explore possible new business models

One core element to consider when working towards new revenue streams is your business model. Questions to ask:

• What is your primary business model today?
  
• What other models might you consider?
  
• Would these new business models replace your existing model or augment it?
  

Beyond simply selling a product, there are a variety of models that could serve your needs. Subscriptions, for instance, have emerged as a common way for businesses of all sizes to optimise revenue and expand what is possible for their operations. This model has become especially popular with software-as-a-service (SaaS) businesses, which rely on subscriptions as one of their core revenue streams. That said, it’s not just SaaS businesses that are leaning into the abundant appeal of subscription models. The attractive economics – subscriptions tend to be stickier and afford businesses better ability to predict cash flow – have prompted businesses in all industries to explore what a viable subscription model would look like for them.

Other business models to consider include:

• Direct-to-consumer
  
• Marketplace
  
• Platform
  
• Affiliate
  

Of course, not every business can easily expand into every type of business model. But it’s worth putting everything on the table in this thought exercise. Start by thinking about the core products and services that you provide and imagine what it could look like to recontextualise them within different business models. Which ones work and which clearly don’t? Which ones allow you to reach new market segments? Embracing a new business model is almost never a low-lift endeavour, but for enterprise businesses that are looking to create new revenue streams, it can be a powerful move in a profitable new direction.

Create a billing strategy to support new revenue streams

If you decide that expanding into a different business model is the right path for your business, there are a variety of tools that can help make that transition as smooth and fast as possible.

Billing software, for example, can help make the setup, operation and long-term maintenance of a subscription system relatively simple. Stripe Billing is a comprehensive solution that uses an API to integrate with websites, apps and CRM systems and allows businesses to set up a subscription payment system in a matter of minutes, even with the complex demands that come with being an enterprise that operates globally.

Stripe’s billing software comes with a suite of other products too, from invoicing to payment links to revenue reports. The product takes a holistic approach to subscriptions, which saves your company the engineering and operational costs of integrating and maintaining disparate systems and tools.

Consider becoming a marketplace or platform

There are a range of tools that support optimised payments infrastructure, including Stripe Connect, which is money movement infrastructure designed to help you manage user onboarding and complex fund flows. Connect is designed to integrate payments into software platforms, which makes it perfectly suited to enterprise businesses. It also enables you to pursue a marketplace business model if you decide to facilitate transactions between businesses or service providers and their customers.

Scope out expansion into new markets

Sometimes creating new revenue streams for an enterprise business doesn’t mean doing something new, but rather doing what you’re already good at in a new place. Expanding into new markets is an exciting possibility that comes with unique challenges and opportunities; it’s an obvious area to consider when trying to diversify revenue streams. A few thought-starter questions:

• Where are you currently operating? Who are you reaching there?
  
• What market segments are you not reaching? Are there market segments with needs and use cases that mirror those that you’re currently serving? What’s presently stopping you from reaching these people?
  
• Into what geographic areas would it make sense for your business to expand? What barriers, logistical or related to positioning, are currently stopping you from doing business there?
  
• Where is the direct competition highest? Where is it lowest? In which of the places where you’re not currently doing business could you provide a strongly differentiated solution to an existing need?
  

Once you have the previous questions answered, try following up with these:

• Into what areas do you have the ability and interest to expand?
  
• What does the near- and mid-term path for this expansion look like?
  

Set up a global payments infrastructure

One high-impact factor that can either facilitate or block access to certain markets is payment methods. Whether you’re concerned with currencies, credit cards or financing options, offering a robust range of payment methods is one of the most effective tools that your business can use to grow revenue.

By combining specific consumer preferences with a wide range of payment methods, you can identify markets around the world that you might not have realised you were missing. In the United Kingdom, for example, 50% of consumers prefer cards, while in Malaysia, 47% prefer bank debits and transfers and only 25% prefer cards, according to Stripe research. Understanding the ins and outs of these preferences and designing your business accordingly can help you to find previously untapped markets.

And while accepting a range of payment methods is advantageous, it’s more important to make sure that you’re accepting every relevant payment method in your key markets. You probably don’t need to accept every possible form of payment, but you should understand how your key customer segments prefer to pay and make sure that you’re able to accept those payment methods.

Stripe offers a wide range of products that can help in this regard. With tools that optimise the checkout experience and assist your business in offering financing payment options as well as a range of currencies, cards or banking choices, your business can expand its total addressable market and tap into new revenue streams with relative ease without a huge cost to your operations. To learn more about these options, go here.