If you were to win a large amount of money and then decided to invest a good proportion of it, would you expect your financial advisor to invest it in just one stock? Just like investing, earning business income should not be done from a single source. When you invest, you choose a wide variety of different stocks (businesses) in which to invest in, in order to leverage any loses to a minimum. This is the approach you should aim for with your business income, if you can diversify the places from where you can earn, and the types of products and services from which you can earn you’ll accomplish the same thing.
It doesn’t matter what kind of business you have, or what your target niche is, you can multiply your earnings by creating multiple streams of business income.
First we create a service or product and then we figure out different ways to make money from it, as a business owner you understand this. You could for instance off a wholesale price for your product to distributors, or perhaps a bulk order discount on services, you can sell your products yourself from your website (I hope we designed it) at full price or if it’s a physical product maybe also in a store.
You could also look at affiliate marketing and it’s always best to start with existing customers, affiliates are businesses who will promote the products and services you offer for you, in exchange for a commission on sales.
Most experienced business owners could write a book, and open up a coaching or consulting business. You could even teach a class about your specialist topic. These are all different income streams surrounding the same product or service.
You want to have a good mix of active income and so called passive or residual income. Active income are activities you perform directly to earn revenue – such as providing a service like coaching, writing, administrative work and so forth. Passive income is when you do work once, and are paid for it indefinitely. This would be something like writing an eBook or information product, or selling memberships to a club or members website.
I’ve actually taken this a step further and combined both an active and residual income together in that I rent to clients websites (residual income as I design it once at the start) and then I provide ongoing monthly services (active income) this, in my opinion is the best form of income (see http://wpfullthrottle.com but note the prices are increasing soon)
The wonderful thing about earning money from a multitude of sources is that if there is a downturn you’re in a much better position than most. As most business owners could in theory write a book, let’s use that as an example.
Your Book: How to ABC
Sources of income for your Book How to ABC:
- Direct book sales
- Product recommendations via blog and book
- Consulting/coaching with people who want to do ABC
- Speaking at events about ABC
- Teaching courses about ABC
- Selling other people’s related products
- Advertising relevant ads on your blog about XYZ
- Writing for magazines about XYZ
These are all legitimate ways to make money just by writing one book, I am sure you can think of others. The book could have been born out of another money making activity such as being a contractor, virtual assistant, writer, graphic designer, internet marketer, or something else entirely like a health and nutrition expert. Whatever your niche you can make money doing the things listed above, creating multiple streams of income that far exceed the potential income from just one activity, this is the secret to true success.
The idea of multiple steams of income works for bricks and mortar businesses too. If you sell a widget retail, you can now offer it wholesale, and attract affiliates to sell for a commission, thereby creating three streams of income from one product. You could expand that further by writing a book, recommending other products, consulting with others and so forth.
It’s not hard to create multiple sources of business income once you start considering all the ways you can earn from one product or service, the real secret however is in actually doing this.