Revenue Model – Dutch Uncles

Hanuman, Working to Ensure Emergency Healthcare Reaches Patients in Time

Vaishali Das — Mon, 12 Jul 2021 10:35:12 +0000

Taking inspiration from the mythological character of Hanuman, the figure bringing sanjeevani for Lord Lakshman and saving his life, the startup Hanuman came into existence. It is a Patna-based healthcare startup working as a last-mile delivery service provider, offering immediate healthcare solutions to the people. Providing users with a world-class platform, Hanuman brings all kinds of emergency medical services at one place. Hanuman stands for help (H), accessibility (A), need (N), utility (U), and mankind (MAN).

Why was the Startup Started?

The pandemic outbreak made Dr. Niraj Jha think about the weak emergency care ecosystem of India. Lack of required healthcare infrastructure pushed Dr. Jha along with his friend Santosh Singh to launch Medicvisor Pvt. Ltd, famous by its brand name Hanuman in 2020.

The startup in its early stage launched a toll-free number to connect with ambulance service. It also came up with e-rickshaw ambulances equipped with oxygen cylinders to meet the growing need amidst the pandemic. The duo soon realised that not having a proper online portal or application is creating confusion for the service operators. The operators failed to understand which ambulance would be nearest to the patient. This challenge led to the launch of an online portal and mobile app for ambulances.

With more than 350 ambulances under its platform, Hanuman is providing services in districts of Bihar.

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लाय सजीवन लखन जियाये । श्रीरघुबीर हरषि उर लाये ।।

Products and Services

The startup offers people to connect with the healthcare services to take good care of themselves and their family. Its services extend to:

Assessing health issues
Booking ambulances
Booking diagnostic tests
Finding the right home health care
Getting medicines
Storing health records
Learning healthier way of life

What Makes it Different from the Others?

The startup’s primary focus is to maintain the price uniformity for ambulance services. By providing ambulances for basic life support with base fare of Rs. 700 and for advanced life support at Rs. 3000 including emergency services, Hanuman maintains a standard pricing in comparison to the regular ambulance charges.

It provides ambulance service time of 15 minutes in Patna and around 30 minutes for other districts, the startup has served more than 7000 patients so far. It is also aiming for the transactional healthcare services like insulin administration, ECG checkup, fetal doppler and eye checkups at home. Hanuman also plans to launch home healthcare services later this year.

Insights For Others

Hanuman operates on a revenue-sharing model with the ambulance operators. It also works with these operators for maintenance of the vehicles and training of drivers. Fast service and affordable prices for ambulance and emergency services is what makes Hanuman stand out from the others. It plans to expand to other cities as well like Jharkhand, NCR and Mumbai.

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What are Key Performance Indicators: A Basic Guide

Roopali Kotwal — Sat, 22 May 2021 05:35:04 +0000

Have you ever thought about what sets a good start-up apart from a great start-up? Well, the difference starts with the ways of working of the business in a start-up. It is true that a performance management system should be in place for an individual in an organisation so is it for the organisation itself irrespective of the fact that the organisation is large or small. In the context of a start-up, the progress of performance of the start-ups shall be measured and tracked by the KPIs that must be set at its early stage. The ‘measurement of outcomes of activities performed’ in a start-up is very important. The ability to analyse and understand the performance indicators of a start-up shall define the success of the start-up. Also, it will play a crucial role in converting a good start-up into a great one.

KPIs: Full form & Meaning

KPIs is abbreviated for Key Performance Indicators. Key Performance Indicators (KPIs), Key Success Indicators (KSIs), Business Metrics or Key Business Performance Metrics, these terms are used interchangeably and they serve the same role i.e. to track and measure the overall health and performance of a company.

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The ability to analyse and understand the performance indicators of a start-up shall define the success of the start-up. And, it will play a crucial role in converting a good start-up into a great one.

KPIs: What is their role and why are they required?

KPIs help to identify problem areas and measure the performance of the business. KPIs constructed well, provide management and potential investors an analytical snapshot of the state or we can see the overall condition of the company.

KPIs track the revenue (average profit, total revenue and new customer revenue), employment statistics (i.e. employee turnover and employee performance), marketing effectiveness like sales generation, efficiency and performance of an individual (employee or his/her manager), processes/departments and therefore performance of the company as a whole.

KPIs vs KRAs

Read the abbreviations aloud! And, yes, read them again. People often get confused between these two terms: KPIs (Key Performance Indicators) and KRAs (Key Responsibility or Result Areas). Both KPIs and KRAs measure and track the performance of the business. However, they both are different and yet important. They are different approaches to meet the business goals and objectives.

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KPIs work like a compass. They keep a track of the business if it is headed in the right direction or not.

How do you identify the KPIs that are relevant for your start-up?

Here are the key stages or steps to identify or choose the right or correct KPIs for a start-up business:

Select and review the KPIs that align and directly contribute to the business objectives
The selected KPIs shall meet the criteria of a good KPI. Ask yourself the below questions and, If the answer to most of the questions is ‘No’, you may need to change or replace these with new and more relevant KPIs:
- If the chosen KPIs can be easily quantified?
- Will they drive the change you want to see?
- Are the KPIs achievable, actionable? Could they be measured in a timely and accurate manner?
- Do these KPIs contribute to different prospects like customer, financial, internal process, learning and growth?
- Will these KPIs be relevant in the future?
Set short and long term KPIs
Share the KPI with the stakeholders and assign the responsibility for each KPI
Analyse and Evaluate current performance
Review of KPIs on periodic intervals i.e. may be weekly, monthly or quarterly basis

After reviewing the progress, you may need to evolve the KPIs. Hence, keep a flexible approach to review and readjust the KPIs if needed.

KPIs: What are the types and list of KPIs in a start-up?

Different areas or departments in a business such as sales, customer retention, cost of customer acquisition, cash flow, conversation rate, employee engagement, employee satisfaction, profit margin, website traffic, employee productivity, inventory Size can be analyzed by various kinds of KPIs. However, depending on the type of business, KPIs selection in a start-up may be different. Let us take a look at some of the key metrics or KPIs in a start-up business:

Active Users or Monthly Active Users (MAU)

Companies with apps and online games or social networking sites, use Monthly Active Users as a KPI to count the number of unique users who visit their company website on a monthly basis. Websites recognise MAU by identifying users’ contact number, email address and username.

Customer Churn Rate (CCR)

CCR means percentage of customers lost during a given or specific period i.e. they have stopped making purchases or unsubscribed from company services. Low churn means current customers are happy and believe that the product provided by the company is solving a problem. For SaaS or mobile Apps, a churned customer is one who cancels their subscription. And for e-commerce, churn rate means customers who fail or do-not make a repeat purchase within an average time frame. That period may vary from 90-120 days.

Customer Lifetime Value or Lifetime Value (LTV)

LTV represents the total revenue or an estimate of the revenue a customer will bring in or spend in your business or on your product or services during their lifetime.

Customer Acquisition Cost (CAC)

With CAC, a start-up can gauge how much they are spending on acquiring each customer. It reflects the money spent on marketing and salaries. CAC and LTV combination is frequently used to compare metrics particularly for SaaS companies.

Gross Merchandise volume (GMV)

GMV is the term used in online retailing business. It denotes the total monetary value of the sales for the merchandise sold through a specific marketplace over a certain period of time.

Gross Profit Margin (GPM)

GPM is the percentage of revenue that is actual profit before adjusting the operating cost such as marketing, overhead and salaries. GPM is determined by revenue and cost of goods sold (COGS).

First Time Response (FRT)

FTR is the difference between the time elapsed between a customer raising a ticket for a service or an issue/problem and an agent’s or customer support staff’s first response to it. Mostly average first response time is measured in business hours unless the customer support is open 24/7.

Revenue Churn Rate (RCR)

RCR is the percentage of the revenue lost in a given period of time due to cancellation or any downgrades. SaaS companies measure this KPI as monthly recurring revenue (MMR) churn.

Monthly Recurring Revenue (MRR)

MRR is one of the most important KPIs for a company that is selling subscriptions. Every new customer addition means a certain amount of money a company will earn every month provided the customer stays as a client. This metrics shows the profitability of a company as well as predicts the expected revenue for the following month.

Revenue Growth Rate

Revenue growth rate measures the month-over-month percentage increase in revenue. It indicates how quickly a start-up is growing.

Conversion Rate

Conversion Rate measures the success of any marketing campaign. Conversion rate calculates the percentage of the number of visitors who take a desired action or complete a goal on your company website. The higher conversion rate reflects the successful marketing campaigns.

Lead Conversion Rate – This is one of the most important top-of-the-funnel conversion metrics. Lead conversion rate is the percentage of visitors who arrive at the company website and are captured as ‘leads’. It indicates the ability of an organisation to attract the right target audience.

Activation Rate – It measures the percentage of people who successfully complete a definite milestone in the company’s on-boarding process. A milestone may vary as per the company business. For instance, a social platform may track the percentage of users who add the first friend in their friend list. Similarly, a music-streaming application may track the number of users creating their first playlist.

Average Revenue Per User or Average Revenue Per Unit (ARPU)

ARPU measures the revenue generated per user/customer or per unit. The term is mostly used by companies that offer subscription services to clients. For instance, internet service providers or telephone service providers.

Conclusion

KPIs work like a compass. They keep a track of the business if it is headed in the right direction or not. What works for a start-up and what doesn’t, can be clearly indicated by tracking the KPIs regularly to avoid repeated mistakes in any business. Key Performance Indicators (KPIs) or Business Metrics as stated above could be classified in various categories such as People Metrics, Customer Metrics and Financial Metrics. However, all these metrics shall comfort the start-ups to know the cause of poor performance, failure, success and results of the action performed and know the improvement areas.

The stated business metrics or KPIs are useful for start-ups in its various stages. However, to be a successful entrepreneur it is vital to narrow down to choose the right KPIs and prioritize them as per the need/growth of the company. Keep it very simple to select the KPIs i.e. make it easy to understand the performance indicators and choose SMART Key Performance Indicators i.e. KPIs that are specific, measurable, attainable/achievable, realistic and time-bound.

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Buy One, Get One Free: Can BOGO be your Sales Approach?

Aakash Sharma — Thu, 20 May 2021 08:35:05 +0000

In recent years, one of the critical retailing concepts to have emerged is the ‘Buy One Get One’ model for customers or ‘Buy One Give One’ for businesses. If you go by the book, Buy One Give One, or BOGO, is a social entrepreneurial model that encourages customers to buy products while helping those in need.

Founded in 2006, the Los Angles based Toms Shoes initiated the BOGO model by donating many items to needy children in developing countries for every item sold to a customer; thus, Toms Shoes is accredited for this model. Though Toms Shoes was embraced, the model has often been criticised by consumers and businesses alike.

Advocates of the BOGO model believe that it is sustainable to add more social and business value to society. Critics argue that these measures are used as nothing more than selling opportunities by commodifying low-income families. There are also various limitations to this model. For instance, it can be a promotion and branding experience however it cannot be a long-term viable business option for new ventures.

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Consumers place a high value on brands that try to serve those in need.

Buy One Give One Sale and which Businesses Use it?

The BOGO sales structure varies by industry. Although sold as buy one, get one free, in most cases, customers get both items at a 50% discount. In some stores, customers also receive a 50% discount when purchasing only one item. Afterwards, companies send the equivalent products sold under BOGO to charity and such related causes.

Most commonly, Buy One Get One sale is witnessed in supermarkets and retail stores. Most businesses use this format to clear their inventory or marked down goods which mean items approaching expiration date. Here in India, this practise is prevalent in Reliance Retail grocery sections such as Jiomart and Reliance Smart. Stores that sell perishable items as well as Fast-Moving Consumer Goods are more likely to have this sales model.

Pros and Cons of the BOGO Model

Pros

The Buy One, Get One model is an effective way to generate cash flow. Businesses can use BOGO if they want to earn more. Often, enterprises mould the terms and conditions so that people tend to buy more products to meet the BOGO criterion, which makes more money for the company.

This model has foundational lines in its ability to help those who have a set budget for the week and for the month or are living with the budget provided by the government. Despite, not having surplus for oneself or if the consumer wants to be a part of the philanthropic act (donation), BOGO can be an option. The consumer through this model feels they have made a positive difference.

Cons

On the other hand, the BOGO model effectively destroys local businesses while going against local industry and increases local unemployment. In terms of philanthropy, people living in poverty do not benefit much from it in reality. The benefits they get generally depend on the goods rather than getting empowered. Due to this, BOGO is rendered as a mere marketing gimmick and a sales promotion propaganda.

The Larger Limits of Buy One Give One Model

Most socially responsible companies cannot succeed by providing products and services for free. It is a mistake to consider that the BOGO model can solve the problem of economic inequalities. The buy one give one model cannot explicitly differentiate between companies’ nature and category, which could compromise the company’s long-term stability. This model is not concerned with supply chain equality but creates a simple short-term selling solution.

At the end of the day, an all-embracing business sells commodities that people want while inspiring employees to do their job adequately. Evidently, buy one give one model is not a sustainable business model. Donating goods or resources does not address the core underlying causes of poverty. In fact, donating stuff for free could potentially prevent any transition to a longer-term, deeper solution by creating dependence within a beneficiary community for external help.

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How to Prepare a Revenue Model for Start-up?

DU Desk — Wed, 28 Apr 2021 11:05:08 +0000

What is a Revenue Model?

A Revenue model is quite simply a conceptual framework that lays out the revenue earning strategy for your business and forecasts said earnings. It is essetial for outlining your strategy to generate a financial income, understand the cashflow of your day-to-day operations.

Setting the Stage

Before you create the model you need to get your sales data and income statements in order. Once you have all paperwork which lays out the company’s expenditure and earnings (for a start-up this could mean investments), you can prepare a revenue model that will help you in forecasting.

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A good revenue model helps forecast unexpected changes which could prove crucial to the survival of your business.

A Step-by-Step Guide: Building a Successful Revenue Model

Step 1: Choose a Model That Supplements Your Company Background

Analyse of the type of company you are running and evaluate which type of model will best facilitate growth while mitigating capital risk. You can strategically choose revenue models such as a markup, commission, subscription, arbitrage, advertising, pay per use, licensing, linear or even exponential models.

Step 2: Convey Value through Your Model

The ideal revenue model should highlight the best parts of the business. This will also act as a point of attraction for investors.

Step 3: Get Investors onboard

Early on it is vital that you identify potential investors who are strategically important in the industry and bring them into the fold. It is essential that you establish every possible means of income in order to maximise revenue.

Step 4: Give Investors a Glimpse of the Future

Investors will only get involved if they know what the end game is. That is to say, when will they see the ROI on their investments? Create a forecast as to when this might be and what the next 12 to 24 months look like. This provides a rough roadmap for your business as well.

Step 5: Adapt and Evolve with the Model

Do not stick to any one model rigidly. Business circumstances, needs and income may change at any moment. Analyse, adjust and even adopt new models as the need may be.

Step 6: Identify and Mitigate Variables

For every business there are countless variables that can and will affect the revenue model. Depending on which stage of the business you are in, you need to predict the risk early on and mitigate it.

What’s in It for Me?

At the end of the day, a business has to be more than a passion, it has to be profitable. This is only possible if there is a strong revenue model in place. Knowing the fundamentals of how to prepare a revenue model will help your business flourish even in unexpected circumstances such as the COVID-19 pandemic that unexpectedly shook most of the world economies.

Having a revenue model is like having a safety need, which every start-up sorely needs in this day and age.

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Set Up Distribution Channels to Grow Your Revenue

DU Desk — Sat, 19 Dec 2020 04:20:20 +0000

If you purchased an item from Amazon and had the package home-delivered, you could be somewhat familiar with the concept of distribution channels. You will rarely find business owners glamorising how they build distribution channels (how they raise funding or tell stories on social media usually tops that list of achievement). But you need several distribution channels to ensure multiple revenue streams and grow your business.

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Getting the product to the end-user is as important as the product itself. This is why you need a good distribution channel in place.

So, What Is Distribution?

Now that you have procured raw materials and developed the goods/services, it is time to go to market and sell them – either directly via the Web, your sales force or retail outlets or indirectly through wholesalers, distributors and the likes. Think of it as business networks through which your products or services will reach all end users. In business jargon, these networks are called distribution channels.

A typical business will use both direct and indirect channels for quicker market access and rise in sales. Take, for instance, any famous cosmetics brand. One can buy its products online, at the company’s retail centres or at the local shop/supermarket. Understandably, the latter gets the stock through indirect distribution, mostly through wholesalers, distributors, dealers and other middle agencies.

Now, let us take a look at the distributors. They are the middle agencies which buy products from manufacturers and sell them to the wholesalers that buy and sell the products to retail stores in bulk. Sometimes the distributor will bypass the whole seller and opt for multiple dealers instead, who specialise in a niche market and deal with very specific products. For a distributor to do their job effectively they need to build and maintain relationships with the manufacturers and stay up-to-date on all the goings-on in the market.

Distributors also manage orders, oversee returns and even sell products on behalf of the brand at times. A good distributor has a thorough understanding of the market and uses that to prompt bigger sales.

Types Of Distribution

Direct

The product is directly delivered to customers or other businesses with no middle agencies involved. A good example of a direct channel is Sony it takes orders from customers directly through their website and has their company deliver it to the customer without an intermediary. These channels can be very effective in the long run. The company will have to spend more on storage and transport for the goods. The direct method is used mostly by businesses dealing in perishable goods, like farmers’ markets.

Indirect

This involves several middle agencies between the supplier and the final point of sales. This includes distributors, wholesalers, dealers, retailers, franchises and VARs (value-added resellers). Since there are so many channels to pass through and all of them have to be paid, the process sometimes ends up driving up the end-price for the customer by inflating the market price. The upside is that it won’t cost nearly as much as direct distribution channels, which means cost saved for the company.

Intensive

The goal here is to gain as much visibility in the market as possible, as fast as possible. This includes everyday consumer products like soaps, toothpaste, bread etc. The things that have a mass-sales capacity and move fast. The more places and the more often your customers see your product, the more likely they are to buy it. Brand awareness is the name of the game. There is a risk to playing it hard and fast: If you end up sending your product to a location where the competition enjoys better customer loyalty, you will run into a loss. Using this kind of distribution channel needs a watchful eye over the current market trends.

Selective

This is when the manufacturer sends the products to a select number of stores in specific locations, giving their brand a more premium feel. The manufacturer can control the price for a certain area and give those customers a personalised shopping experience. This method allows the brand a certain amount of edge over the competition since they can target specific areas where the competition may not have the best customer following. This method allows you the opportunity to target these weak spots in the market and use them to your advantage.

The Whirlpool company is a good example of this as they sell their appliances through dealer networks in specific areas where they can expect a better sales rate. These often include middle-to-high-income residential areas or office campuses where demand for air conditioners and other white goods will be high.

Exclusive

Manufacturers sell these items to a select number of middle-agencies. You get a better profit margin from luxury items. For example, Rolex, iPhones and supercars. With that being the case, there is no real need for intensive mass productions and sales like that of everyday items because the higher price tag makes up for it.

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There is no one single way to distribute your products or services, but it is important to know where to start. For that you need a solid strategy to build your distribution network.

How To Build Distribution Network

Find the market

Before you start forming any sort of distribution plan, you need to consider the market. Look at what your product is, and which demographic, in which area would find the most use for your product. Once you identify the need in the market and you know for sure that your product can meet those demands, only then do you move ahead.

Know your competition

Find out everything you can about the rival brands – look at what distribution strategy they use and how successful they are with those methods. This gives you a rough idea of how you could expect your product to perform once it hits the market. Let the enemy do the work for you.

Choose the best channel

Now comes the time to start laying the groundwork. You need to see which type of distribution channel would best suit your product and help it perform well in the market. If it is a top-of-the-line diamond-studded watch, you should choose an exclusive distribution channel that includes a select number of stores and customers. If it is ice cream soda, you may choose the intensive method to outshine your competition.

Whatever you choose, you not only need to make sure that it complements the type of product you are selling, but you also need to see if it falls within the budget. If not, you need to account for that and make the necessary adjustments, because what matters most is making sure that the product flies off the shelves at the end of the day.

Set up the chain

Now it is time to approach channel partners, but before you do, ask yourself: What is the logistics? You need to have a clear idea of how orders and return will be handled, if there will be storage needs, how the inventory will be accounted for and so on. Once you have the answer to these questions, you are ready to go.

Pricing and Revenue

You must support your channel partners and pay them for their services. Treat them as a business partner and as a customer. After all, they also have a business to run, so promote their businesses as well. Provide them with training and advertisement where you can to increase their internal efficiency.

No matter what you choose as your ideal strategy, make sure to keep tabs on the chain of distribution. Do a regular performance analysis. See if the customers are happy and if everything is performing as well as it should be.

Check out our article on ‘business automation’ to see how you can step up your business’s operations.

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