Technological advancement is undoubtedly the new goldmine. However, Techpression highlights some ways to make money running a tech company.
Tech companies make money through various revenue streams, primarily by selling software and services, advertising, and facilitating transactions.
Standard models include: subscriptions (recurring user fees), licensing (selling rights to use software), transaction fees (taking a small cut of each financial transaction), advertising (selling targeted ad space), and consulting/managed services (charging for expert advice or ongoing IT management).
However, here is a breakdown of some key ways tech companies generate revenue:
Product and Service Sales
Selling Software to End Users: This involves selling software like operating systems, productivity tools, or video games directly to individuals.
Selling to Businesses: Many tech companies sell specialised software or platforms to other businesses to help them with operations.
Leasing Licenses: Instead of a permanent sale, companies can lease licenses to customers for a recurring fee, allowing them to use the software.
Advertising
Targeted Advertising is a major revenue source for many large tech companies, such as social media platforms. These companies collect user data to deliver highly specific ads, which they pay a premium for.
Subscription and Transaction Fees
Subscriptions: Users pay a recurring fee (monthly or yearly) for access to a service or product, like streaming sites or specific software.
Transactional Fees: Companies can make money by taking a small percentage of each transaction on their platform, such as financial transfer services.
IT and Business Services
Consultancy Fees: Tech companies provide expert advice on IT strategy, infrastructure, and optimisation to other businesses.
Managed Services: Ongoing maintenance and management of a client’s IT systems are offered for a recurring fee.
Project-Based Services: Companies are paid to develop custom software or implement specific IT solutions on a project basis.