8 Steps to Adding Extra Income Streams in Your Home Business
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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. Over 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 difficult, time-consuming, and expensive.
Fortunately, things have changed today. The Internet has made it easier, faster, and more affordable to generate multiple income streams.
Creating more than one income stream sounds overwhelming, after all, you already have one source of work, now you need to create more? But adding more income options to your existing business doesn't have to be overwhelming, and the benefits of having of several sources of income make it worth the effort.
Benefits of Multiple Income Streams
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 you’re laid off or 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 in work by having different things to do every day.
- You can create income streams based on your interests, talents, and passions.
Disadvantage of Multiple Income Streams
Of course, there are a few challenges with 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 growing and profitable. Barbara Winter likens it to plate spinning.
- The start-up time for each income stream is time and energy consuming.
How to Create Multiple Income Streams
Even with the challenges, the benefits outweigh the potential problems, especially if you build additional income related your existing home business. Here are tips to adding more income streams to your home business.
1. Take out a piece of paper and write your main business product or service in the middle to start a mindmap. If you’re a virtual assistant, you’d write VA in the middle of the paper.
2. Create four spokes 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.
3. Create spokes off of each of these categories with ideas on how you can make money at them. Earning sources include books, courses, merchandise, coaching, freelancing, speaking, training, selling advertising, and affiliate marketing. For example, a virtual assistant can create tangible or digital products, such as books, courses, and videos that teach others how to be a virtual assistant in the “products” spoke.
For services, she can offer additional services, coaching or speaking (i.e. How a Virtual Assistant Can Save Businesses Time and Money). Under other, she can expand her business by bringing on contract virtual assistants and become a manager of a VA company. 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.
4. 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 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).
5. 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.
6. 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.
7. Wait until one income stream is up and running before starting the next. If you have several additional income ideas, wait until you've got one up and running before starting the next one. Work to have systems, schedules, and tools in place to help you manage existing income streams, so you don't become overwhelmed.
8. Drop an income stream if it isn’t working. 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, drop it.
Although adding income streams takes time, creating them within your current business is faster and easier than starting completely new income streams 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 thousands of other products including its own product, the Kindle, is a print and digital publisher, and now produces television shows. 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.
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