In today’s rapidly changing economic landscape, relying on a single source of income can be risky.
Whether you’re a professional, an entrepreneur, or a business owner, diversifying revenue streams is a proactive strategy to secure financial stability and long-term success. Revenue diversification involves creating multiple revenue streams, reducing dependency on any single one, and spreading risk across different avenues. Let’s explore the benefits of new income streams, and walk through five different strategies to expand your sources of income.
Benefits of Diversifying Revenue Streams
You create a sense of financial stability: Having multiple revenue streams reduces the impact of fluctuations in one area, which creates more financial security for you in both your business and in your personal life, especially during times of uncertainty.
You create more opportunity for growth: diversification allows you to tap into different markets or industries, opening up new growth prospects and expanding your reach (tip: when considering tapping into a new industry, make sure it’s one that’s truly aligned with your expertise and passion).
It reduces risk: The most dangerous number in business is one. Diversifying your revenue streams minimizes the potential negative effects that an economic downturn or challenge can pose to your business.
Research the market and find out which type of diversified income is best suited to you
There are various ways to diversify your income, but it’s important to choose a strategy that’s aligned with your long-term vision, your bandwidth, and your goals.
Every option has its potential advantages and challenges, so it’s crucial to take advantage of online resources, industry trends, and learn from others who have successfully ventured into these areas and identify the key drivers that lead to their success.
Make sure to evaluate the current market conditions and trends, assess the competition, know your target audience, and above all else, know your risk tolerance.
Expanding your income earning potential is a strategic move that requires thorough research and thoughtful decision-making, but by doing your homework, it can lead to more financial stability and long-term prosperity.
5 ways to diversify your revenue streams:
#1: Start an Online Business
If you’re an expert at your craft and looking for ways to grow your income, starting an online business is an easy and cost-effective way to diversify your revenue streams, as it doesn’t require much of an initial investment upfront.
Once you’ve identified a profitable niche, you can begin building your online presence – positioning yourself as an expert in your industry. From there, you can start by doing organic outbound lead generation to start conversations with ideal customers, and grow your client base without paid advertising or even investing money into building your website (this can be later down the line).
When clients who are experts in their field with a track record for success in their career come to us wanting to launch a business for the first time, I always recommend starting with one flagship high-ticket offer – and here’s why:
It takes the same amount of time, money and effort to market a high ticket offer as it does to market a low-ticket offer.
The key difference is that you’ll need significantly more customers to buy your low-ticket product, program or course in order to reach your revenue goals.
Not only do you have to attract these customers, but you’re also responsible for ensuring top-notch service delivery if you want them to become repeat customers or refer their friends (you can see how this time can quickly start adding up!)
On the flip side, selling high ticket requires less customers to hit your profitability goals, and ensures you have the bandwidth to serve them while still being able to spend time doing other tasks in your business.
This is especially helpful as a solopreneur or someone with a small team, who is still heavily involved in other areas of the business.
#2: Invest in Real Estate
Real estate is a great way to get your money making money for you and creating an additional source of passive income, that has been a popular form of revenue diversification for awhile. Investing in properties can provide a steady income stream through rental properties, and over time, property values may appreciate, yielding significant returns. Some ways to consider tapping into the real estate market:
- Rental Properties: Purchase residential or commercial properties to generate rental income.
- Real Estate Investment Trusts (REITs): Invest in publicly-traded REITs that own and operate income-generating real estate assets.
- Real Estate Crowdfunding: Participate in real estate projects by contributing funds through crowdfunding platforms.
Here are a few resources to check out if you’re interested in real estate investing:
- In this podcast interview with Ryan Pineda, multi-million dollar real estate business owner, on the Kelly Roach Show, Ryan shared tips on why real estate will always be a powerful industry, and how he is changing the industry. Listen here.
- In this podcast interview, Jack and Michelle Bosch, Co-Creators of Land Profit Generator, share about the benefits of land flipping: a simple way to leverage real estate that most people don’t think to tap into. They discuss the process of getting started, identifying the hot market, buying, selling, and creating cash flow. Listen here.
#3: Become an Affiliate Marketer
Affiliate marketing involves promoting products or services from other companies and earning commissions on your successful referrals. It’s a great source of passive income – as long as you make sure to partner with reputable businesses and programs that you know, like, and trust.
You can consider becoming an affiliate for a specific technology or software that you use in your business, a coach, consultant or service provider that aligns with your audience’s needs and that you have thoroughly vetted (you should be confident in their ability to deliver and serve – especially if you’ll be referring your clients to this person!) or a product you use in your day to day.
Partnering with another organization is a great way to create passive revenue as you don’t have to run it, staff it, or maintain it.
Once you’re ready to begin generating referrals, leverage your email list, podcast, existing social media platforms and online presence to drive traffic through your affiliate links.
You can also make a personal introduction for existing or past clients if it makes sense for them – doubling the lifetime value of your customers.
#4: Introduce Multiple Services or Products
Customer acquisition is a huge piece of how you grow. However, when you look at where the dollars should be coming from in your business each week, month, quarter, and year, you should have income streams from all different directions that provide consistent cash injections in a number of ways. Most small businesses have a one dimensional cash injection strategy, which is why it becomes very stressful to achieve their growth goals. If you’re relying on either launches, or consultations to drive all of the dollars in your business, that is the hardest and most expensive way to grow.
Launching a new product, program or service is a great way not only diversify your revenue but ascend clients through your offers when they’re ready – creating customers for life.
Chances are, your clients are investing in a multitude of programs or services in your industry or space. And when you don’t offer them, they’re going somewhere else to get them.
Think about those areas of the business that you refer out constantly, and ask yourself what it would look like if you offered it in house as another stream of income, so that you could service your customer in more than one way that’s still in alignment with the North Star of your business.
This should come once you have two things in place:
#1: Client success and results in your existing flagship program (don’t try to do too many things at once if you’re still dialing in your current offer or program).
#2: The team or bandwidth to serve clients in these new programs (consider whether it will require manpower or be primarily pre-recorded content that you can create once and sell over and over again).
There are many types of services you can consider offering that layer onto your existing programs:
- A mastermind model. This could be a virtual or in-person retreat, quarterly meetup, a series of collaborative weekly or monthly calls, or an exclusive 1:1 mentorship opportunity with you. Masterminds are generally less focused on tactics, and more focused on high-level strategy and elevated conversations. They are typically structured as loose and collaborative environments that aren’t centered on a content curriculum, but based on strategic networking, partnerships, community, and experiences. There are various types of masterminds, such as celebrity mastermind groups or niche mastermind groups, so consider what makes the most sense for your audience.
- Tier 2 program: This type of offer should be a continuation of your flagship that progresses people through the next level. For us, our Legacy Builders program is a great example of a Tier 2 program that supports business owners who have now scaled their business and need support on operational excellence, systems, and documented processes. Consider what our audience would need support with as they begin to see results in your program, and how you can support them at that next level. Typically, a Tier 2 Program would be offered at a higher price point, with more exclusive access to you, additional resources, and include the resources they already have access to in your flagship program.
- Downsell or cross-sell: This type of offer is typically a more affordable way to work with you, that requires less time and resources. This works for individuals who don’t necessarily need ongoing 1:1 support and just want access to a core curriculum of content, or are at a more beginner stage and not yet qualified to work with you in your flagship program. This should be low maintenance for both you and your customers, at a much lower price point than your programs. This can also serve as an add-on for existing customers
#5: Take on Freelance or Consulting Work
Many companies and business owners are willing to pay for specialized services without committing to long-term employment – which means freelancing or consulting for an organization or individual is a great option if you have the bandwidth to serve more clients in a high-touch, 1:1 or done-for-you capacity.
As an entrepreneur, you may offer consulting or freelance services to previous employers, past clients, or even potential clients who either need more personalized support or aren’t ready to commit to a 6 or 12-month group program.
As a professional, you may start off with consulting or freelance services on the side of your full-time job, as you work to build your list of prospective clients for your group program.
This could lead to referrals as you begin to produce high-quality work for your clients.
Pro tip: it’s a good idea to speak with your current employer to make sure you aren’t going against any company policies. Your freelance or consulting work should be done outside of your working hours and on your own time.
Revenue diversification is the key to create a sense of financial well-being, grow your income, and build your wealth passively.
By exploring new avenues of income, you can decrease risk, create new opportunities, and adapt to a changing market.
Whether you decide that starting an online business, investing in real estate, becoming an affiliate marketer, adding new product or service offerings, or starting freelance or consulting work, each path offers unique advantages and should be considered based on your current bandwidth, capacity, skills and interests.
Remember to do your research and identify opportunities that align with your skills and long-term vision.
And above all else: embrace the opportunity that comes with diversifying your revenue, so that you can secure a more stable, predictable, and financially secure future for yourself and your family.
If you’d like to explore working with our team to create new income opportunities in your business, book a free strategy call today to discuss your current business practices and goals.