The original version of Barbara Winter’s book, Making a Living Without a Job, came out in 1993, and in it, she recommended creating multiple “profit centers,” as opposed to building a single income stream. More than ten years later, Robert Allen, the real estate entrepreneur, also wrote a couple books promoting the idea of multiple streams of income.
Back then, building more than one source of income was often difficult, time-consuming, and expensive. Fortunately, things have changed, and the internet has made it easier, faster, and more affordable to generate multiple income streams. Adding more income options to your existing business doesn’t have to be overwhelming, and the benefits of having of several sources of income can make it worth the effort.
Beyond making more money, there are several great reasons to consider building more than one source of income, including
- It’s easier to create several small income-producing streams over one large one. For example, it’s easier to create three streams that earn $1,000 than one stream that earns $3,000.
- It reduces the risk of being left without any income. If one source of income drops, you have other sources to help you get by. Especially in home business, which has an ebb and flow, you can offset the dry spells by having another source of income.
- It helps you avoid boredom at work by giving you different things to do every day.
- You can create income streams based on your interests, talents, and passions.
Of course, there are also some challenges with having multiple income streams:
- It’s difficult to keep on top of all tasks that need to be done for every income stream.
- It’s a balancing act to give enough attention to each income stream to keep them each growing and profitable. Barbara Winter likens it to plate spinning.
- The start-up process for each income stream can be time- and energy-consuming.
Steps to Creating Multiple Income Streams
Even with the challenges, the benefits outweigh the potential problems, especially if you build additional income related to your existing home business. Here are some steps that will help you add more income streams to your home business.
One way to start is by creating a mind map. Take out a piece of paper and write your main business product or service in the middle to start a mind map.
Next, create four spokes coming out of the middle, titled “products,” “services,” “advertising/affiliate,” and “other” off of your main product or service. These are categories of types of income you can potentially generate off of your existing business.
Create more spokes off of each of these categories with ideas on how you can make money at them. Earning sources include books, online courses, merchandise, coaching, freelancing, speaking, training, selling advertising, and affiliate marketing. Not all businesses will be able to come up with ideas for each spoke, but every business should be able to develop extra income streams from their home business idea.
Focus first on passive income streams that you create once, but they continue to generate income. For example, writing a book is a passive income stream. You write it once and sell it over and over. The word passive is a little deceptive because you need to write and market the book. Nevertheless, compared to non-passive sources of income, which you need to do over and over to make money, such as providing a service, passive income streams require less time once they’re created.
Other forms of passive income include other written works (i.e., courses), audio or video creations, affiliate marketing, licensing your idea, franchising, or continuity programs (i.e., memberships).
Next, focus on income streams that can expand your business. For example, public speaking or teaching can create additional income, as well as generate new clients. Another option is freelance writing, in which you’d get paid for an article that would also promote you and your business.
What to Keep in Mind
Choose and set up one income stream at a time. The planning and launching of a new stream is the most time-consuming. Avoid the temptation of jumping into several ideas at one time, as putting your focus into many areas at once will dilute your efforts and slow you down. Work to have systems, schedules, and tools in place to help you manage existing income streams, so you don’t become overwhelmed.
You want to give your additional income streams the time and effort needed to get them running, but if they don’t start generating income, or if you hate it, then drop them.
Although adding income streams takes time, creating them within your current business is faster and easier than starting completely new ones from scratch. This method of generating extra sources of income works well for any size business in any industry.
For example, Amazon.com started by selling books. Today, it sells millions of other products, including its own products, is a print and digital publisher, offers media streaming services, offers business services, and more.
Many service-based business owners add coaching and books to their income streams. Bloggers who start with affiliate marketing often create their own books and courses to add to their income stream. You can create additional sources of income for your business, as well.
Culled from thebalancesmb.com by Leslie Truex