Understanding a Company's Business Model and Revenue Streams
Understanding a Company's Business Model and Revenue Streams
Understanding how a company makes money is critical for interview success. This knowledge demonstrates commercial awareness and allows you to align your skills with the company's core financial objectives, transforming you from a generic applicant into a strategic candidate.
Why Understanding a Business Model Matters in an Interview
Knowing a company's business model shows you've done your homework. It proves you are not just interested in a job, but in the company's success.
This insight allows you to tailor your answers. You can directly connect your past achievements to the company's primary goals, whether that's acquiring new users, reducing customer churn, or increasing ad revenue.
It also helps you ask more intelligent questions. Inquiring about challenges or opportunities related to their revenue streams shows a higher level of thinking.
How to Research a Company's Business Model
For public companies, start with their annual (10-K) and quarterly (10-Q) reports. These are filed with the U.S. Securities and Exchange Commission (SEC) and detail exactly how they generate revenue.
For private companies and startups, this can be more challenging. Use resources like Crunchbase or TechCrunch to find information on funding rounds and business strategies.
Also, analyze the company's website and product. Are they selling a physical product, a monthly subscription, or showing ads? This is often the most direct clue.
Identifying a Company's Key Revenue Streams
A revenue stream is a specific source from which a business earns money. Most companies have more than one.
Look for a "Pricing" or "Products" page on their website. This is the most straightforward way to see what they sell and how they charge for it.
Read recent press releases or news articles. A company's announcements about new products or partnerships often reveal their financial priorities and new revenue initiatives.
Finally, consider their industry. An e-commerce company's revenue streams will differ vastly from a B2B software company.
Common Business Model Comparison
| Business Model | How It Makes Money | Key Customer | Example Metric |
|---|---|---|---|
| SaaS | Recurring subscriptions | Businesses (B2B) or Consumers (B2C) | Monthly Recurring Revenue (MRR) |
| E-commerce | Direct sale of goods | Consumers (B2C) or Businesses (B2B) | Average Order Value (AOV) |
| Advertising | Selling ad space/impressions | Businesses (Advertisers) | Cost Per Click (CPC) |
| Marketplace | Transaction fees or commissions | Both buyers and sellers | Gross Merchandise Volume (GMV) |
Answering Common Questions (FAQ)
### What is a business model?
A business model is a company's plan for making a profit. It identifies the products or services it will sell, its target market, and its anticipated expenses.
### What are the most common types of business models?
Common models include Software-as-a-Service (SaaS), e-commerce, advertising-based models, and marketplaces. Many companies use a hybrid approach combining elements of several models.
### How do I find a private company's revenue?
This is difficult as they are not required to disclose it. Look for articles in business journals that estimate their revenue, check for press releases about their growth, or use databases like Crunchbase that may have informed estimates.
How to Weave This Knowledge Into Your Interview
When asked, "Why do you want to work here?" go beyond a generic answer. Mention their business model directly.
Example: "I'm particularly interested in your freemium model. My experience in user onboarding could help convert more free users into paying subscribers, directly impacting your core revenue stream."
Use your research to ask insightful questions at the end of the interview.
Example: "I see that you recently expanded into a new market. How has that impacted your subscription revenue versus your enterprise sales?"
How Cruit Can Help
Researching a company is the first step; aligning your profile is the next. Cruit's platform provides the tools to translate your research into a powerful application.
The Job Analysis Module compares a job description against your resume, highlighting where you match and where your gaps are. This helps you focus your research on the business areas most relevant to the role you want.
The Career Guidance Module features an AI Mentor. You can use this confidential space to brainstorm how to frame your understanding of the company's business model and practice articulating your value proposition in a way that resonates with their financial goals.
This guide was created by Cruit, a career growth platform that helps professionals build and execute their career strategy.