As a business, it can be risky to rely solely on one revenue stream because if there is a sudden downturn in the market you can quickly find yourself struggling to maintain your cashflow.
Therefore, to protect yourself from such an occurrence, it is worth taking steps to diversify how your company generates its revenue – which, in turn, will put it on a firmer footing.
But how do you do that?
Here are some practical ways you can help your business earn more money.
- Create new sales channels
One of the easiest ways to generate further revenue is to create more sales. Doing this will enable you to sell your products to more people in different ways.
For instance, if you run a brick-and-mortar operation but don’t yet trade online, you should launch a website store as soon as possible to tap into the lucrative world of e-commerce.
Conversely, if your business is purely online, you can consider opening pop-up stores or selling at markets to diversify your income stream.
At the same time, consider selling your products wholesale, as well as directly to different types of customers - for instance to corporate businesses and the general public.
- Enter new Geographical Markets
Another straightforward way you can diversify your business’s revenue streams is to enter new geographical markets.
This could either be on a state or national level. For example, if you only sell your products in Queensland, you can begin to market them to potential customers in New South Wales. Similarly, if you only sell your products in Australia, you can also start to offer them in New Zealand, assuming you can ship them without issue.
As a rule, the more geographical markets you can enter, the more customers you will reach and the more revenue you will generate.
- Find New Customer Segments
If your products are selling to some customers, the chances are they will be attractive to others as well. You just need to determine in what way.
For example, if you run a lolly shop, you might create specific product offerings aimed at businesses who are looking to give out corporate gifts or run marketing promotions.
Alternatively, you could focus on couples who are getting married and need confectionery for their bonbonnieres.
- Increase your product line
For any business, increasing your product line is a good opportunity to generate more revenue and a savvy way to do this is through complimentary products.
Sometimes, the opportunity is more obvious - a clothing company can offer accessories to go with their apparel. However, other times, it requires thinking outside the box, such as the case with the French company Bic, which makes shaving products, pens, cigarette lighters, windsurfing equipment and kayaks.
Overall, the bigger your product line, the more chance you have of making sales.
- Make Investments
So far, the strategies outlined above have focused on the products and services your business offers. However, another excellent way to diversify your company’s earnings is through the dividends it receives from investments.
Doing this could help to make your capital work better for you, especially over the long term. You just have to look at the TLS price on the ASX to see the potential for profitability.
Aside from the Telstra Group, there are plenty of other companies and industries your business can invest in to reap the rewards of an additional revenue stream.
- Sell advertising space
Selling advertising space, whether that be on your website, email newsletter or in your store is an innovative way to generate more revenue, which many businesses don’t tap into.
You might think it is counter-productive because you want all eyes focused on the products and services you are selling. However, if you view the piece of advertising as a separate product in itself, you should recognise the potential for steady revenue it will bring in over time.
When it comes to selling advertising space, the bigger your reach in terms of foot or web traffic, the more you can charge those who want to buy it from you.
- Sell your expertise
Anyone who runs a business has a level of expertise. So, why not take the opportunity to benefit financially from it?
Some of the best ways to do this include selling e-books or videos, running training sessions, offering business coaching services or holding Q&A style presentations.
It’s human nature to seek knowledge and solutions, particularly with regard to doing business better. So, as there are many other entrepreneurs and business executives who are looking for answers, this might be a potential gold mine for you - assuming you have a track record of success.
