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9. Revenue Model
9.1. How BX makes money
While the BX platform is free-of-charge to all BSUs, BX will charge all BX BSPs a percentage on the actual payment they received from each BX BSU as service charge.
For example62, a Taiwan-based BX BSU spent a total of NT$60,000 to have an Australia-based law firm register a new company in Australia for it. Presumably, BX can collect on average NT$3,00063 as its service charge from such law firm.
Assuming this law firm can complete on average 100 similar transactions each month for the same country, BX can collect NT$3.6 million/year from such law firm.
Assuming BX has 10 such law firms in 10 different countries, BX can collect NT$36 million/year from them.
Assuming BX has 30 such law firms in 30 different countries, BX can collect NT$108 million/year from them.
The above examples do not yet take into consideration the CPA firms (as well as other BSPs) that BX will also make available on the BX platform. Accordingly, it is not unreasonable for BX to expect to collect a much higher revenue amount from BX BSPs each year, especially after the initial phase.
62 Based on the writer’s actual experience of registering a new company in Australia with Taiwanese shareholders.
63 Assuming a minimum of 5% commission will be charged.
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9.2. Other revenue sources
In addition to collecting a fixed percentage service charge from BX BSPs, BX will explore the possibility of developing revenue streams from the following sources:
Platinum package for BX BSUs who frequently use the BX platform:
A fixed amount of service charge will be payable monthly in advance to BX, then BX deducts the required amount and pay it to the relevant BX BSP after such BX BSP has completed the transaction.
Advertisement space for vetted top tier BSP:
For jurisdictions that are not yet ‘stationed’ by a BX BSP, any vetted top tier BSPs may opt for a simple advertisement of its services on the BX platform as long as they belong to the relevant business service categories (this list is by no mean exhaustive): company secretariat, notary public, intellectual property protection, product registration, customs and shipping, commercial property leasing, commercial insurance, property management, talent search and payroll, public relations and advertising, translation and printing.
Total package deal for BX BSUs who desire one-stop shopping:
Instead of approaching different BX BSPs one-by-one and be charged separately to complete all business start-up steps (from company registration to a fully-staffed, fully functional office), BX BSUs can order a complete one-stop package comprising all the required business services at a discounted package
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price.
Secondary BX BSP:
In certain more popular jurisdictions which are ‘stationed’ by a BX BSP (“Primary BX BSP”), it may become necessary for BX to bring in another BX BSP (“Secondary BX BSP”) to the same jurisdiction.
The only scenario that requires this drastic arrangement is when the number of transactions within such jurisdiction evidently overwhelmed the capacity of Primary BX BSP, leading to widespread or potentially widespread customer dissatisfaction.
To make this arrangement acceptable to Primary BX BSP, BX will offer it with an incentive package which it cannot voluntary refuse: Secondary BX BSP will pay twice the amount of the usual service charge to BX, of which half will go to Primary BX BSP (which Primary BX BSP can use to offset the service charge payable to BX); Secondary BX BSP will only get called upon to service the BX BSUs when, and only when, a demand overflow situation is triggered.
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The capital required for setting up an internet startup such as the one BX contemplates will not be substantial. A considerable portion of the total initial one-off expenditure will be used on purchasing new laptops and the relevant productivity software.64 The figure shows the founding team does not need a huge amount of capital to make a start.
Before BX can work out how much revenue it can roughly generate, it firstly needs to establish how much it will cost to acquire each new customer. Since BX has considered targeted internet ads (such as LinkedIn Ads) to be the most cost-effective way of reaching its wider target audience, the figures used for the assumptions are devised in light of this marketing tool. It then works out that BX will need to spend NT$270,000 each month, reaching 12 million small business professionals on LinkedIn, in order to acquire about 90 non-repeated paid customers each month.65 The figures give BX a further understanding in terms of which metrics to manipulate/improve in order to maximize the return on the internet ads spending (such as getting higher click through rate or lower average cost per click).
With respect to expenses, BX has identified two major cost components from the key activities outlined under Article 4.2: (1) technology aspect – product development and platform management, and (2) human aspect – user experience measurement and marketing/
personal selling. Whichever aspect it is, as an internet startup, BX expects major expenditures on personnel and worldwide exposure, which is why the two largest expense
64 See Exhibit 2.
65 See Exhibit 3.