Everyone loves the idea of opening new revenue streams in their business. Every business owner knows multiple streams of revenue are better than 1 stream of revenue! This year, we made some adjustments in our revenue streams that have been very profitable. HOWEVER, we’ve also been through those attempts at opening up new revenue streams that just flopped… Big time… Hard core… Massive fail!
So let me act like the big sis here, and just tell you how to make it work! Because nothing is worse than working like crazy to open up a new revenue stream and then not making money. Actually, I lied. Something is worse. Opening up a new revenue stream, working your BUTT off to launch. Asking your entire team to work their buns off for your launch. And then actually decreasing in revenue. Let’s give a moment of silence on behalf of my great flop of 2015.
Here’s 4 steps that will set you up to win in your new revenue streams.
- Open the new revenue stream at the right time. Just because you can pursue a new revenue stream, does not mean that you should, or that now is when you should. Are your other revenue streams solid? Can they continue to produce with you being less involved? It will take time to open up a new revenue stream. Do you have the time? On the other hand, some business owners are guilty of not opening up a new revenue stream soon enough. They see their numbers going down on an existing stream, and they hold out hope that something will change to bring back the “good old days.” Here’s a hint, if you are longing for the “good old days,” go watch The Wonder Years. But in business, open your eyes to the trends. Sears would not be closing so many stores, if they had opened up a new revenue stream from online sales 12 years ago. Instead they are trying to increase their online sales now and it’s too late. Timing matters!
- Start small. The motto “Go Big or Go Home” is great in some cases, bad in others. In the case of new revenue streams, that type of thinking can hurt you. When you open up a new product, branch of your company, or service, you’ve got to build a new system to support marketing and sales. That can be very costly in time and money. So before you sink $1 million into a new product launch, test the waters. Offer the existing service to a few of your key clients. Work out your processes. Get valuable client feedback. If it’s running smoothly, and can be managed with existing revenue streams, stick with it. If it’s competing with your existing streams for either time, money, or people, you should seriously consider getting out. It’s not an additional revenue stream if it kills a pre-existing revenue stream!
- Create results. During this small test group, you need to generate some results. The success stories of the people using the product or service should be documented. This is the phase to gain positive testimonials and referrals. Use this time to make sure your fulfillment is scalable. Ask yourself the question, “If I had 100 people using this (product/service) right now, would the quality remain as high?” If you can’t answer yes to that question, you aren’t ready to expand the pool. Keep working with a small group until you KNOW you can rock with a bigger pool of people.
- Expand the pool. When you are ready, meaning your sales system is working, your marketing plan is producing, and your fulfillment is awesome, then it’s time to expand the pool. By now you’ll have established formulas. You’ll know that if you acquire 100 leads, you’ll close 10 deals. You’ll know that if you sponsor one event, you’ll acquire 150 leads. You’ll know that you need 1 team members to take care of every 10 accounts. You’ll have the data you need to expand the pool and keep quality high.
Expansion is great. Multiple streams of revenue is fantastic! Make sure you have a solid strategy in place so you can grow and build something that will last and be an asset to your overall success.