Entrepreneurs must see how to evaluate the business model to make money is the hard truth
Abstract: although such as Jingdong, like Amazon well-known listed companies, is still at a loss (or losses based), but the annual revenue size, user scale is growing, which makes investors and creditors are full of confidence for the future, I believe it can in the future profitability, and bring high returns.
in the discussion of business models, to determine whether their idea is feasible, can be judged from many aspects, here is a PL based on (Loss, Profit&). In fact, in the course of the business, I found this method applies to venture capital to determine the project, entrepreneurs innovative business logic.
first let us return to the business of the most essential logic: Revenue – cost = profit. All businesses are for the purpose of profit, its survival consideration is whether to create profits, and can be achieved even in favor of capital talent shows itself, is listed, can lower cost to create more revenue, achieve higher profits.
I know a lot of people like to use the example of Jingdong, Amazon to hit my face –
Jingdong, such as Amazon well-known listed companies, is still at a loss (or losses based), but the annual revenue size, user scale is growing, which makes investors and creditors are full of confidence for the future, that it can make it profitable in the future twist, and bring high returns, but in the long run no doubt, the ultimate goal is the net profit of these enterprises.
there are many people who love with burn O2O, financial products (such as lending treasure) to hit my face, but you can easily find these burn means is still in order to obtain the users, expand the scale, to further explore the profit model.
mentioned above, only in the case of external capital injection can occur, and at present, the role of the venture capital. Of course, after the entrepreneur must be listed, "if it can’t heart murmur dilution the good ah, so there are" risk capital + bank loans "joint injection mode.
strictly speaking, the market accounted for service revenue. As a result, entrepreneurs face the problem is: in the industry involved, can create a higher income at a lower cost?
in such a simple equation, the answer is only two: first, to raise revenue (Raise Revenue), and the two is to reduce costs (Cut the Cost).
Part 1: increase revenue by
revenue from what constitutes? In any industry, any business income can be abstracted as:
Revenue = Average Selling Price>