Multiple Revenue Streams

Many small businesses are “one-horse towns” – they have a single product or service that generates revenue. This may have worked in the start-up phase, but is a dangerous strategy for a growing business, and could prove to be catastrophic in a down economy. Reliance on a just one stream of income can be as risky as to be dependent on a single customer. As needs, fads, and disposable income change, market for the service may dry up.

Most business owners can readily find sources of income that are complementary to existing products and services. Look at the skills, equipment, and disciplines of your organization. How might they be used in different ways? What are the trends in your industry? Brainstorm with your employees on ways to branch out. Ask customers what they need that you aren’t currently providing. Ask customers what related services they are buying from other vendors. The answers might surprise you.

But do enter a new revenue stream with caution and with a sound strategy. Put together a business plan. Just as in starting a new business, determine how much demand there is, consider how you will market the new product or service, and calculate costs and profitability potential.