Question

What are some of the risk of having multiple revenue drivers? Only one? How do volumes and margins interact?

Answer 1

MULTIPLE REVENUE DRIVERS

The revenue multiple or in alternative words the magnitude relation of a companies valuation to its revenue could be a ordinarily used metric to worth startups.The explanation is that the majority startups have negative earnings before interest taxes depreciation and amortization and profits.Therefor it isn't attainable to worth them supported these metrics.However it isn't attainable to easily take one company's revenue multiple and directly apply it to worth another company.Specifically completely different corporations demand valuation that replicate different revenue multiples.The explanation this is often that , a company's revenue multiple is driven by varied factors.

Low profit margins are the great way to attract cost-conscious customers because you are able to offer them a lesser price.and you aren't concerned with running through your customer pool.For instance if you are selling a product to a local market ,in a niche industry your customer pool is inheritantly small and inevitably run out.High profit margin organization can make fewer sale than a low profit margin organization because the cost of their product is not marked down.