Many home-based business owners have a single service or product
they provide. They may sell e-books or crafts or speech-writing
services. Specializing in one area is good for many reasons. For
one, it makes marketing easier and helps that business build a solid
reputation in one area.
Although specialization has its benefits, businesses who derive
all of their profit from a single area are overall more susceptible
to economic fluctuations and less profitable long term.
A good example of multiple streams of income at work in
traditional business is the modern newspaper. A newspaper company
brings in revenue in three ways: by selling the papers, by selling
advertising space, and by selling classified ads. Each of these is
another stream of revenue for the newspaper. Furthermore, some
newspapers have added an additional stream by charging for access to
their online content.
For the home-based business owners like yourself, the key is to
follow the advice of the old saying: "Don't put all of your eggs in
one basket." Instead, you should work on developing multiple streams
of income.
Think in terms of a river. One river may have hundreds of small
tributaries and streams emptying into it along its path. Without
these waterways, the river level would fall considerably and may one
day disappear completely. The same is true in business. Your revenue
is like that river; it needs to be nourished by many sources, not
just one. If that one source slows down or dries up, the negative
impact on the flow of your revenue is dramatic.
Once you understand why you need multiple streams of income, the
question is how do you create them. One home-based business owner
who specialized in writing secured her multiple streams of income by
owning her own business, doing freelance work for two other
companies, and teaching a class at a local business college.
Another home-based business owner joined affiliate programs
offered by big name retailers and earned money by imaginatively
incorporating them into her heavily trafficked web site.
Still another took his existing product which was designed to
help marketers produce effective e-zine articles, made some minor
changes, and re-packaged it as a tool for students struggling to
write school essays.
As these examples show, multiple streams of income can be derived
in a number of ways if you think creatively. The key is to look for
ways that complement your existing business.
If you sell gourmet cookies, for example, you could produce
cookbooks. If you work with Internet marketing, set up an online
bookstore full of marketing books via an affiliate program. If you
design web sites, teach a course on it at your local college or
offer it online through your existing business site.
The possibilities for establishing multiple streams of income are
endless. But you must always remember that the key to successfully
managing multiple streams of income is not to lose focus on your
primary revenue generating activity.
Have you ever been to a web site so covered in ads that you could
not tell what service or product was even being sold? Most people
have. The people who run those sites do not realize that visitors
are not coming to see banner ads for other companies' products, but
to learn more about theirs.
When visitors are bombarded by these other ads, they leave in
frustration. In the long run, the site loses money because it simply
isn't generating enough sales to justify charging a decent rate for
advertising. The idea is balancing these other ways of earning you
money without taking away from the income stream you already have.
Once you have your streams in place and learn how to maintain
this equilibrium, your revenue will flow like a steady river and
will keep your home-based business on solid ground.
