Understanding Business Revenues (2) – Short- and Long-Term Factors

In this video, we spend a few minutes considering some of the short and longer-term factors that influence the growth of revenues for a business.

Seasonal and Cyclical Factors

In many markets, sales are seasonal and so are revenues. Examples?

• Tourism and travel, leisure activities
• Retail and hospitality, seasonal food and drink

Cyclical factors are the macroeconomic variables affecting demand:

• Unemployment levels, job security and real wages
  Interest rates on loans
• Consumer confidence / general economic uncertainty

Longer Term Factors Affecting Business Revenues

Changes in the strength of competition within a market:

• Hotels v AirBNB
• Cinemas versus subscription streaming services

Long-term changes to the age structure of a country’s population

• Longer-term shifts in consumer tastes and preferences
• Rise of plant-based foods, protein drinks, low-sugar & low salt food
• Growth in demand for non-alcoholic drinks

Technological changes – creating new demand for innovative products
What are you spending money on now that you didn’t 5-10 years ago?