If you are considering going into business, you may want to consider having multiple streams of business. Having multiple streams means that you have more than one profit center. Now you may hold the belief that one should be focused and put all your effort into just one product of service. Being focused is necessary but most big businesses have a primary product or service and more than one profit center. Small businesses, too, can benefit from having more than one source of income in a changing economy.
There are at least three reasons to consider having multiple streams of business
Economic
You’ve chosen a business that can bring in only a certain amount of profit. You can write only so many resumes per week and then there are weeks when you have too few clients. There is a limit to how many dogs you can walk before and after your full-time job. You can only accept so many children into your popular after-school art classes. You love what you do; it brings in some income, but you are limited by time and/or space.
Growing Your Main Business
Developing new business streams might be a way to grow your main business so it brings in more money or to enables you to do it full-time. The resume writer can offer interview coaching or job search coaching, of publish an e-book or paper on Amazon on how to ace interviews. The dog walker might have a blog or website about dogs that has space available for advertising or that leads visitors to online retailers to purchase their products (affiliate marketing). The after school art teacher could do affiliate marketing of art and craft supplies for children or create a course (online or DVD) or a membership site for moms who want to learn how to teach art to their children. (Desired by moms that home-school and moms that are concerned because art is one of those subjects that cash-strapped school systems have eliminated from the curriculum) These ideas are all related to your core business but they provide another source of profit.
Variety
You need variety and change. You can’t see yourself focusing on one thing for the rest of your entrepreneurial life! So make or do the several things that you want to do. Maybe you will have a business for each season. Maybe you will blog about something you find fascinating and do affiliate marketing for a related product. Maybe you will write an e-book on how to do something and promote it with YouTube videos. You probably have more than enough creativity to pull this off.
Some of the above examples of streams are active and some are passive. Active income streams generally involve a trade of work for money, which means that your time is consumed. If you are already trying to do too much, you may want to consider a passive income stream because once they are set up they provide income without additional work contribution. Some passive income streams require significant money to start with, but significant cash is not needed to publish an e-book, start a membership site, become an affiliate marketer, or create apps.
So how can you identify what new stream of business you should try first or next? Barbara J. Winter in Making a Living Without a Job: Winning Ways for Creating Work that you Love offers a number of tips, that have been adapted for this blog.
- Figure out what you want to do. Brainstorm, mind map, ask your friends and family what you do best. Then pick out one stream of income that you will be happy doing and put it at the top of your list. Prioritize any additional ideas that you might like to try later.
- Estimate how much it will cost to put each of your priority business streams into operation. This step will most likely require some research. Interview people who are in a similar business, use the internet to find the wholesale cost of item you will need, make an appointment and talk to someone at the SBA (Small Business Association)
- Estimate how much profit each of your potential streams will generate in the first year. You are looking for a realistic view of what your profit margin will be during your start-up.
- Take a look at the analysis you have done on these business streams. Which will cost the least to start? Which will be more profitable? Do you have the time and energy to get the stream started?
The best solution is to choose the business that will make the most profit and cost the least amount of money to start.