What is a monetization plan?

A monetization plan refers to a comprehensive strategy that outlines how a business intends to generate revenue from its products or services. This plan is essential because it provides the framework for understanding the different ways a business can effectively capitalize on its offerings. It includes considerations of pricing models, sales channels, target customer segments, and the value proposition that the business delivers. By having a clear monetization plan, startups can align their product development and marketing strategies to ensure that they are attracting and retaining customers in a way that also supports their financial goals.

While other options mention aspects relevant to business operations, they do not adequately capture the essence of a monetization plan. For instance, while reducing product price or increasing features can play a role in overall business strategy, they do not directly focus on the revenue generation aspect. Similarly, a strategy for reducing expenses is an important operational consideration but is not related to how a company captures revenue from its activities. Therefore, understanding the revenue capture mechanisms is crucial for any startup aiming for sustainability and growth.