Many home-based business owners have a single service or product they provide.
They may sell e-books or crafts or speech-writing services. Specializing in one area is good for many reasons. For one, it makes marketing easier and helps that business build a solid reputation in one area. Although specialization has its benefits, businesses who derive all of their profit from a single area are overall more susceptible to economic fluctuations and less profitable long term.
A good example of multiple streams of income at work in traditional business is the modern newspaper. A newspaper company brings in revenue in three ways: by selling the papers, by selling advertising space, and by selling classified ads. Each of these is another stream of revenue for the newspaper. Furthermore, some newspapers have added an additional stream by charging for access to their online content.
For the home-based business owners like yourself, the key is to follow the advice of the old saying: “Don’t put all of your eggs in one basket.” Instead, you should work on developing multiple streams of income. Think in terms of a river. One river may have hundreds of small tributaries and streams emptying into it along its path. Without these waterways, the river level would fall considerably and may one day disappear completely. The same is true in business. Your revenue is like that river; it needs to be nourished by many sources, not just one. If that one source slows down or dries up, the negative impact on the flow of your revenue is dramatic.
Once you understand why you need multiple streams of income, the question is how do you create them. One home-based business owner who specialized in writing secured her multiple streams of income by owning her own business, doing freelance work for two other companies, and teaching a class at a local business college. Another home-based business owner joined affiliate programs offered by big name retailers and earned money by imaginatively incorporating them into her heavily trafficked web site.
Still another took his existing product which was designed to help marketers produce effective e-zine articles, made some minor changes, and re-packaged it as a tool for students struggling to write school essays. As these examples show, multiple streams of income can be derived in a number of ways if you think creatively. The key is to look for ways that complement your existing business.
If you sell gourmet cookies, for example, you could produce cookbooks. If you work with Internet marketing, set up an online bookstore full of marketing books via an affiliate program. If you design web sites, teach a course on it at your local college or offer it online through your existing business site. The possibilities for establishing multiple streams of income are endless. But you must always remember that the key to successfully managing multiple streams of income is not to lose focus on your primary revenue generating activity.
Have you ever been to a web site so covered in ads that you could not tell what service or product was even being sold? Most people have. The people who run those sites do not realize that visitors are not coming to see banner ads for other companies’ products, but to learn more about theirs.
When visitors are bombarded by these other ads, they leave in frustration. In the long run, the site loses money because it simply isn’t generating enough sales to justify charging a decent rate for advertising. The idea is balancing these other ways of earning you money without taking away from the income stream you already have. Once you have your streams in place and learn how to maintain this equilibrium, your revenue will flow like a steady river and will keep your home-based business on solid ground.