Multiple Streams of Income – 5 Reasons Why You Absolutely Need it
In a nutshell, multiple streams of income mean your business has more than one way to make money. For instance, you sell products and you sell services. Those are multiple streams of income. Why do you need them? Below are five reasons.
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I’ve become enamored with the word “multiple,” especially when it pertains to business. I especially like the idea of harnessing the power of the multiple to grow your business multiple times over.
There are a lot of things that can be multiple in a business, but in this article, I’m focusing on multiple streams of income.
In a nutshell, multiple streams of income mean your business has more than one way to make money. For instance, you sell products and you sell services. Those are multiple streams of income. Why do you need them? Below are five reasons:
1. Make money while you sleep. This is a big one for those of us who sell our time (also known as providing services). The biggest drawback to selling time is when you aren’t working, you aren’t making money. So when you’re on vacation, relaxing over the weekend, or (gasp) sleeping, no money is coming into the business.
But let’s say you create a product or two to sell in addition to your services. Now you’ve just created a passive income stream (passive meaning it doesn’t require yours or anyone else’s time). So if you are taking a nap or out walking the dogs, money can still be coming into your business. (What a concept!)
2. Leverage your time. This is especially true with income streams that are passive. Basically, you’re making money without it taking any of your time. Therefore, you can spend your time doing something else and still enjoy money coming in from a passive income stream.
This is a good way to use your time wisely. (Rather than work for an hour, get paid for an hour, you can be paid several times in several different ways during that same hour.)
3. Fill your pipeline. If all you sell is high-priced services, it can be difficult getting clients to hire you. After all, clients need to trust you and trust they’re getting a good deal for their money.
If you offer products or lower-priced services, you’re giving those customers a chance to “try you out” before plunking down several thousand dollars for a major project or consulting work. Because your clients’ initial investment is lower, you have a chance to lower their resistance to hiring you.
4. Catch a variety of clients. No matter what you offer, a part of your target market is not going to be interested in hiring you. Why? Because they’d rather do it themselves.
Or maybe they don’t have the money to hire you. Or maybe they do the same thing you do and would rather learn from you to better their own skills. By offering a product or a class or a group option, you’re widening your net. Not only are you able to help more people, but you’ll also be making more money doing it.
5. Diversify. The more income streams you have, the less devastating it will be to lose one. Not to be negative, but things happen. Industries change. Economies change.
People want different things. If all you offer is services, and those services suddenly become obsolete, what happens to your business? Or, a more likely scenario, what if you lose your biggest client?
Or a couple of big clients at the same time? Sure, eventually you’ll find other clients to make up the difference, but what happens in the meantime? What if it takes a month or two or six? Your bills certainly won’t wait that long.
But if you have other income streams, a dip in your services (or a dip in product income) is no longer so scary because you’ll still have money coming in.
Creativity Exercise — Find time to create multiple income streams
Probably the hardest part of creating multiple income streams is a lack of time, especially when your primary business is service-based. So, now that you know how important it is, how are you going to find the time to start doing it?
Here are a few ideas to get you thinking:
* Hire a virtual assistant (VA) or bookkeeper to take care of some tasks you have no business doing anyway.
* Create systems in your business so you can complete business tasks faster and more efficiently.
* Raise your prices so you can take on fewer clients and make more money.
* Dedicate a Saturday or Sunday to working on your business. (Be careful with this one as you could very quickly end up burning yourself out.)
Get a pen and paper and do some brainstorming to see how you can find more time to start creating more income streams.