Why Small Businesses Need Multiple Streams of Income
September 3, 2013 by Josh Buscay
The Downfalls of Trading Money for Time
Does money fall from the sky for youÉ If not, you have to ask yourself why? Is it because you are still trading time for money? If you are a brain surgeon this might not be such a bad gig, but anybody who is trading time for money faces the same issues; your revenue is a direct result of your time and if something prevents you from being able to perform the work, money is not flowing to you.
This is a major downfall for a lot of small businesses. The revenue is only being generated when the work is being done, and the work is only being done by the owner. So what happens if the owner gets sick, has a family illness, is involved in a divorce, wants to take a vacation, or numerous other scenarios? The money stops flowing.
As entrepreneurs we have to look at the bigger picture if we even want to have the freedom that comes from owning our own business. Taking the time to identify other streams of income that can produce revenue without your direct involvement is critical to the success of your business, not to mention your sanity.
Let’s say you are a web developer and you are the only person in your company developing the websites. As the developer, you have limited your income to the time it takes you to develop a website. What would happen to your business if you got sick, took a vacation or didn’t have time to obtain new clients? Now let’s say you are still a web developer, but you outsource the work to a third party and you take on the role of project manager, allowing you to service multiple clients at a time. Now you have time to develop different streams of income such as offering hosting services or e-commerce solutions that provide you with on-going residual income. You could also put together a series of “how to” videos or webinars teaching clients how to maintain their own websites. All of these options allow you to have money flowing through multiple channels without trading your time.
Establishing Multiple Streams of Income:
Affiliate Relationships- Identify other products and services you can partner with that you can offer to your client base and receive an affiliate commission. This should flow both ways. If you have a product or service, you should offer it through affiliate partnerships to other related databases.
Lead Generation- Are you good at building relationships? Then instead of doing the work, leverage your talents and generate leads for people in your industry. If you are a massage therapist, generate leads for other providers and take a piece of the action.
Educational Resources- Never underestimate your expertise and what people will pay to know what you know. Put together a series of training videos, resource guides or webinars training people in what you do, and charge for it. The great thing is, once you develop the program, you can keep selling it over and over again.
Offer Memberships or Service Plans- If you are a massage therapist, you could offer a monthly membership fee similar to a gym membership. Web services can sell maintenance contracts.
Recycle Your Database- If you have a database of prospects who never took action on your offer, it doesn’t mean they’ll never do anything. Identify new products or services you can offer to this group and start testing the waters.
By establishing multiple streams of income, you receive the freedom and flexibility to deal with life issues and the time to focus on growing the business. To help you brain storm some ideas for generating additional revenue we have put together a money flow worksheet. Please feel free to download and use for your business. If you have any questions or just need help getting started, please feel free to contact us at 1-800-648-0966, and we would be happy to help.