To make your business more profitable and financially stable, owners should consider adding new revenue streams. Although this may seem overwhelming on top of your regular responsibilities running your company, finding a new stream of revenue doesn't necessarily mean additional work.
These tips can help you and your business find new sources of revenue stream without overloading your resources.
What is a revenue stream?
Simply put, a revenue stream is a source of income.
"A revenue stream is simply a way/method in which companies generate sales," says Dave Lavinsky, president and co-founder of Growthink, which has helped more than 500,000 entrepreneurs launch and grow their own businesses.
"There are several ways to create a revenue stream that will all depend on the type of business you run," says Mark Evans, founder of Summer Camp Hub. "They can range from investing or offering a service to selling a product."
How do you find a revenue stream?
Finding a secondary revenue stream may seem daunting at first. You're already working tirelessly to maintain your primary revenue stream and improve your business and its processes.
According to Nelson Sherwin, manager of PEO Compare, a shift in perspective is essential. "Too often, business owners are so focused on continuing to do what they've always done, and they don't step back every now and then to think about how to go about creating more streams," he says. "In almost any entrepreneurial endeavor, there are additional streams to be found if you learn to analyze the issue."
Practically speaking, Sherwin suggests some targeted brainstorming.
"Toss questions like these around: Are there training courses that could be created around your present product/service? Can you find other customer bases and create products/services for them? A tried-and-true method of generating ideas for new revenue streams is to ask current customers what else they would buy from you if you offered it," he says. "Once you have a few successful experiences, this kind of targeted creative thinking will become easier."
What are some creative revenue streams?
While considering new revenue streams for your business, a great place to begin is looking at your product or service from start to finish. What steps can you take now that you have an established customer base? How can you make your business more appealing and universal?
Lucy Kelly is a jewelry designer and the owner/artist behind bel monili. She started her business 10 years ago and recommends digital products as a source of secondary revenue. "This could be online courses, tutorials, webinars, printables, templates, or guides," she says.
Kelly created her own secondary income stream by designing a product for other handmade sellers. "I have learned a lot about the unique needs of handmade business owners when it comes to branding, marketing, social media, and website building," she says. "I took my knowledge in that area and created an online course that teaches other handmade sellers on how to bring their offline businesses online. That course is now a nice solid passive revenue stream in addition to my jewelry business."
Jason McCarthy, owner of DigiNo, an online teacher-recruitment business, was able to identify several sources of secondary revenue by breaking down the needs of his clients.
"I had to get creative to make up for lost revenue when applicants aren't hired for jobs," he says. "I had to look deeper at every aspect of my business. For instance, an applicant didn't just need a job, they also needed a laptop and headset to perform the job—so I could promote these as an Amazon affiliate. The applicant would also need a teaching certificate. I then became a teaching certification course affiliate. Is that enough revenue streams? Only if I stopped looking!"
McCarthy also became an affiliate for other necessities, such as webcam software and ergonomic desk chairs, and even created online courses to train people for jobs. An added bonus of creating these multiple revenue streams was that McCarthy's applicants became more qualified, which in turn created more income from his primary revenue stream of placing teachers.
Creating secondary revenue streams may temporarily create added work for business owners. But by examining your business and creatively devising new ways to earn passive income, you can establish more stability and spend less time stressing out about maintaining profits. Secondary revenue streams allow you to grow your business without sacrificing the quality of your products and services.