This article is going to expand your knowledge of revenue streams. Let's set yourself up for success by reducing slow months, strategically implement recurring income, increase monthly earnings and a change for you to take your streams full-time!
I know you're probably familiar with the term diversification. This term would be known in regards to lessening your financial risk and diversifying your financial portfolio, but we're not talking about that today.
This article is covering the different streams of income that one could possibly implement into their personal or business lives.
Question: What is revenue diversification?
To diversify your income means adding multiple streams of revenue to supplement your current job (main source(s) of income).
The Ansoff Matrix
This matrix is used for growing businesses through product/marketing strategies, with its main focus being a strategy of growth.
Looking at the quadrants you can see that each decision carries risk with it.
Let's look at - Market Penetration:
The goal is to have existing products in existing markets as an optimal choice in increasing your market shares. This is the lowest risk strategy that one could make in business. By deepening your connection to your customers through loyalty points or rewards, you leverage their commitment to the company.
Another example of leveraging customer relationships is to create affiliate accounts to convert customers into brand ambassadors.
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Let's look at - Product Development:
The goal is to have new products enter existing markets. When implementing this strategy into your business, it's important to remember that the risk level is medium because you are offering new products that customers may or may not truly want to buy.
This is why it's very important not to rush your research and development process while you are collecting information about your customers needs.
Another strategy that many companies use is to upsell to their existing customer base to increase the weight of their sales.
An example of this could be Dominos Pizza adding a new range of speciality drinks to their menus in Hamilton, Ontario.
Let's look at - Market Development:
The goal is to have existing products enter new markets. This is another medium-risk strategy because you might have the knowledge and history of your products but where you choose to sell is the question at hand here.
Your aim should be to reach newer geographical market for existing products.
Let's look at an example:
Dominos pizza introducing their UK hot-sellers to the Canadian markets. This is an example of a company tapping into newer distribution channels to increase market awareness using familiar products/services.
As a new business it is important to factor in the customers needs through a survey or other research methods to see if the introduction of products/services would be a fit for the both company and it's customer base.
Let's look at - Diversification:
The goal is to sell new products to new markets. Based off of in-depth research on this topic the conclusion is that diversification is the high risk strategy to participate in. Reason being is because you have a fifty-percent chance of getting high rewards and/or returns. On the opposite end of the spectrum you have a fifty-percent chance of failure happening as a result of participating in this level of risk.
An example of this type of strategy being implemented is Domino's pizza selling mini-pizzas in mobile vans in a growing market like China or India.
Let's look at the 8 main types of income streams - in no particular order
Active income stream: You provide service/work in exchange for payment
Passive income stream: Income is not directly tied to the work that you do
Earned income: Income received from working a job
Profit income: Selling a service/product for more than they cost you
Interest income: Gaining passive income through savings (compound interest)
Dividend income: Buying shares in a company (becoming part-owner of said company = entitled to dividend payments)
Rental income: Generating income from rent (substantial upfront investment, timely)
Capital gains income: buying/selling assets (stocks/shares) the difference between buying and selling is your capital gain (ex: buy stock for $100 sell for $120 = $20 gain)
The Importance of revenue diversity
You will avoid financial ruin if you lose you main source of income
Having multiple streams if income will help cushion the fall of a job loss (when combined with E.I and other resources)
Gives you capacity to build your emergency fund, retirement or other investments
If you have a main stream of income, then additional revenue streams will protect you from financial uncertainty
Here is a curation of the best revenue streams to date:
Create a side hustle based on what you like to do and see if there if a market for it
Drop-shipping is a melody of marketing mixed with selling products. By definition: Vendors fulfil orders from a third party and has them shipped directly to the customers (https://www.dropshipping.com) has an amazing website that lists and links 12 of the best drop-shipping suppliers in Canada (free and paid)
Become a freelancer and upsell your services/products to existing clients
Get paid with money or product by becoming an influencer: Sign up with sites like: influenster, Pinchme, L'Oreal consumer product testing panel, bzzagent, houseparty, Allure beauty enthusiast, pink panel
Invest in real estate (crowdfunding or REITs- real estate investment trusts: earn money from a publicly owned REIT is like earning money from stocks. you receive dividends from company and any sell your shares at a profit when their value in the marketplace increases
Invest in real estate; Crowdfunding or REITs: Crowdfunding is the process of getting a pool of investors to raise capital for a real estate project. REIT's let you earn money from a publicly owned properties. There like earning money from stocks. You receive dividends from the company and may sell your shares at a profit when the value in the marketplace increases
Diversify your investments = Owning stocks from several different industries, countries, risk profiles (investments like bonds, commodities, real estate)
Sell digital products: examples are selling items like software, e-books, audio files/music producing software, games, printables (PDF), plug-ins, templates
Create and sell online courses: platforms that you could look into are udemy, kabaji, teachable, thinkific, academy of mine, podia
Earn money online and charge an hourly, monthly or per-project rate by becoming a social media manager. Their role is to analyze data (engagement), identify trends in customer interactions and plan digital campaigns to build an online community
Pay off your credit card debt- The credit card company charges interest on the full balance since this is how they make their money
Sell physical handmade items: examples are jewelry, art, photography, sewing, bath/body products, candles, wedding/event invitations
Another option is to participate in gig work to bring in passive income such as: fiiver, upwork, become an airbnb host, taskrabbit worker, lyft/uber driver, proofreading/editing, virtual assisting, and article writing
Open a high interest savings account to really make some passive income on your sitting money. A regular savings account = 0.30% interest, however, using a traditional bank leaves you with 1.05% interest on your money while online banks and credit unions can leave you with up to 2.00% interest added onto your money.
Are there any recommended resources Tee? Well yes, yes there are a few resources that I can direct you towards in order to begin making income someway, somehow!
Resource #1: What's the perfect side hustle for you by American Express
Resource #2: Revenue Streams: Crash Course Entrepreneurship #13 (Youtube)
Resource #3: Entrepreneurial You by Dorie Clark
Thank you for reading and I appreciate your visit and consumption of this topic.