Instructor Resource
Neck, Entrepreneurship, 1e
SAGE Publishing, 2018
Answers to Questions in the Text
Chapter 10: Creating Revenue Models
ENTREPRENEURSHIP IN ACTION
Shane Kost, Founder, Chicago Food Planet Food Tours and Food Tour Pros
1. What do you consider to be the most important factors driving revenue in Chicago Food
Planet Food Tours and Food Tour Pros?
2. How does the company use revenue to grow the business?
3. Kost believes that lifestyle and working toward goals are more important than accolades
and financial returns. Do you agree with his view? Why or why not?
Sample answer: Answers may vary from student to student. Consider pointing out, however,
A Point Worth Pondering: While he was not an entrepreneur, per se, Viktor Frankl—a famous
psychiatrist, writer, teacher, and Nazi concentration camp survivor—often gave the following
advice to his students, advice that you will discover a lot of successful entrepreneurs embrace
along their journey to success.
Don’t aim at success—the more you aim at it and make it a target, the more you are
going to miss it. For success, like happiness, cannot be pursued; it must ensue, and it
only does so as the unintended side-effect of one’s dedication to a cause greater to
oneself or as the by-product of one’s surrender to a person other than oneself.
Happiness must happen, and the same holds for success: you have to let it happen by
Instructor Resource
Neck, Entrepreneurship, 1e
SAGE Publishing, 2018
ENTREPRENEURSHIP MEETS ETHICS
Creating Revenue Models
1. Do you believe there should be an ethical boundary on the percent of profit a company
should get? If so, who would decide on the boundary and how would it be enforced?
Sample answer: This kind of question opens up a bag of ideological and political worms,
students are therefore bound to differ in their opinions. In a perfect world, everyone would
Who is right? We will leave that up to individual opinion and class discussion. It should be
2. Should the ethical boundary on profit margins depend on the type of product or
service?
Sample answer: Yes, because not all products and services are alike. Some products and
3. Does the ethical boundary on profit margins depend whether the company “earned” the
profit?
Sample answer: Answers may vary from student to student. The issue of profit margins can be
Instructor Resource
Neck, Entrepreneurship, 1e
SAGE Publishing, 2018
MINDSHIFT
Is Value the Same Thing as Price?
1. What are the differences between your pricing estimates and the actual pricing? What
do you believe is the source of the differences?
2. As a consumer, do you care more about the price of certain items than others? What
influences your level of concern about price?
3. In this exercise, did you learn anything that surprised you?
RESEARCH AT WORK
From Freemium to Premium
1. What do you see as the benefits and disadvantages to the freemium business model?
Sample answer: The main benefits include drawing increased traffic to your website, products,
2. What considerations would you take into account when designing your freemium model
strategy?
3. How would you encourage your user to convert from freemium to premium?
Instructor Resource
Neck, Entrepreneurship, 1e
SAGE Publishing, 2018
Summary Questions
1. Define a revenue model and distinguish it from the business model.
2. Illustrate the ten most popular revenue models being used by entrepreneurs.
There are many effective revenue models. Commonly employed models include: Unit sales
3. Explain how companies generate revenue by profiting from “free.”
4. Identify the drivers that affect revenue as well as cost.
5. Identify different strategies entrepreneurs use when pricing their product and service.
6. Explain different methods of calculating prices.