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Having a primary plan of attack (i.e., a main revenue stream) is a good idea, for obvious reasons. However, having only one revenue stream puts pressure on it and you to succeed, which is a sure-fire stress-inducer if ever there was one. That’s where diverse revenue streams come in.
Diversifying your income by having multiple sources will reduce the pressure to succeed through a one-dimensional business plan. With some pre-planning, you’ll be well set for a more consistent income.
This piece will look at why this is the case. We’ll also offer the steps you’ll need to follow if you want to set up your own diverse revenue streams. Let’s get started!
An introduction to diverse revenue streams
If you’re unsure of what we’re talking about, diversifying your revenue simply means to earn money from multiple sources, rather than relying on just the one. You might think that this is tantamount to diluting your revenue, but it’s far from the case.
In fact, there are plenty of reasons why it’s a great idea. For example:
- Relying on a single stream puts a lot of pressure on it to succeed — it essentially holds your entire business up.
- You get to offer related services, which has a knock-on benefit to your reputation.
- You personally get to change up what you do day-to-day, which offers variety and can help to keep your outlook fresh.
Of course, the exact reasons for creating diverse revenue streams will be personal to you and your business needs — and that’s completely fine. In a nutshell, having revenue coming from different sources has plenty of upsides, with little risk.
How to diversify your primary income to increase your cash flow
Now we’ve ascertained that diverse revenue streams are a good (and potentially necessary) step to take, let’s show you how to do it. To begin, you’ll need a crystal ball.
Step 1: Consider where your industry is heading and beat the rush
Before you do anything else, you’ll need to ascertain the current lie of the land in your own industry. You should look at current trends to try and predict where your industry is headed, and capitalize before everyone else does.
This has a great short-term prospect in that you’ll practically own the market for a period of time.
However, as the old saying goes: “The bigger they are, the harder they fall.” Your competitors will soon jump on the bandwagon you’ve created, so staying ahead of the game could potentially be harder than getting there in the first place.
To accurately predict the future, you’ll need to adhere to certain principles. For example, extrapolate from the data you’ve already gathered, and use past industry cycles to plan out what you’ll think will happen in the next year, five years — or even the next decade.
Step 2: Set clear goals for what you want to achieve
Once you have a clear picture of where your industry or niche is headed, it’s time to plan your goals to get there ahead of your rivals.
No matter what your business does, planning for the future should be a large part of any decision you make, so you’ll likely have an idea of how to do this already.
In essence, you’re looking to set smart revenue and business-related goals every step of the way.
Some aspects can be derived directly from your sales strategies, such as setting activity, waterfall and stretch goals, and incentivizing progression. However, you’ll also want to look at making sure those goals are realistic and achievable. In short, this means thinking non-linearly about the goals you set, and not relying too much on number-crunching.
Step 3: Choose diverse revenue streams and put them to work
Finally, you’ll be in a position to actually choose an additional source of revenue and begin implementing it. Of course, this won’t replace your pre-existing primary income stream, merely complement it with additional sources.
For example, if you create products, adding an extra line that fills a niche you’ve predicted will crop up is going to be your best approach.
However, for other businesses, finding a new method of distribution could mean you’re walking into a completely unfamiliar field. For example, video rentals are now just a memory, with many of those business either falling by the wayside, or changing their delivery method to digital forms of media (for example, Netflix).
On the whole, you’ll want to find a suitable stream you’re comfortable with that fits both your overall business goals and the goals you outlined specifically for revenue diversification. If you plan as we’ve outlined in this piece, the rest of the process will be relatively smooth sailing!
Having a Plan A is all well and good, but if it were to falter, the impact on your income doesn’t bear thinking about. Instead, having multiple revenue streams can help your income remain consistent regardless of how each revenue stream ebbs and flows.
This piece looked at how to add diverse revenue streams to your primary way of making money. Let’s quickly recap the steps you’ll need to follow:
- Think ahead to where your industry or niche is heading, and look to beat the rush.
- Set clear goals, which will help give you focus as you progress.
- Finally, pick your additional revenue stream, and begin putting it into action.
Are you thinking of setting up diverse revenue streams? If so, what’s holding you back?