036 Diversify to Thrive: Reducing Pressure on Your Business with Multiple Income Streams

On this episode of Money Through Ease, host Regan Bashara walks you through diversifying your income (revenue) streams for your business, as well as ways to support your business by making income elsewhere. We often put a lot of pressure and strain on our small businesses to support us financially when they are not ready to. It’s okay to take that pressure off by switching things up. This is a concept that I’ve been introduced to by my sales coach, Keli Lyn Jewel.

Diversification is a long-term strategy that you can choose to do in your business to make it more resilient against all of life’s unexpected fluctuations. And you can reinvest profit back into your business if you have another source of income to support you personally.

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Welcome to money through ease. I'm your host, Regan Bashara. I'm the founder of All Ease Accounting. As a reminder, if you are listening for the first time or if you've been a listener this entire time, I want you to go leave me a review and a rating for this podcast, and please share it with your network. This helps me increase visibility and reach more small business owners like yourself so that I can help them. The concept that we're talking about today is taking the pressure off your business by finding other sources of income. Normally I'm not one to tell you to diversify your offers or add more stuff to your plate. I know we are all extremely busy business owners and sometimes the thing that holds us back in business is that pressure that we put on our business to support us financially in our personal finances when it comes to making more money. Sometimes we fall into this trap of having only so many waking hours during the day. We've only got so many clients that we can help at a certain time. We've only got so many customers walking through the door, but this actually isn't true. There are so many ways that you can add revenue streams to your business. Or leverage the time that you're not spending in your business, AKA your personal time, to make some extra cash. So, let's get started. Number one let's talk about the benefits of having multiple income streams for yourself. So your small business can be an income stream in itself. It can provide you with an income, hopefully, and then your business can have multiple income or revenue streams within it. So your business may support you financially. You may take like an owners draw every month, but then your business can have different ways that it makes money and I want to talk about that diversification of revenue. The benefit of doing this is of course we want to increase the financial stability of our business and its resilience. So right now, we have, you know, experienced a lot of inflation this year and last year in 2022 in the United States, it's made, you know, groceries, the cost of living, gas, everything has gone up. There are fluctuations in the market. And if our business income streams are diversified, that gives us more stability. Because people may be willing to spend so much money on this thing and not so much on that thing. But if you're offering both things in your business, you know that means that somebody wants what you've got, and they're willing to pay you money for it. This makes your business more resilient, and kind of braces you against those market fluctuations. The second benefit is that we reduce the risk of relying solely on one type of income. For you, so if you are a small business owner and that's all you do to make money, if you have other ways that you make money like a side hustle or a part time job or a full time job or something else, some other way that you make income for yourself, then you don't have to rely on your business as the sole financial support in your life. Another benefit is that we can really see what's working in your business if we have multiple revenue streams, and what's not worth your time and energy. If we have our financial reports, our profit and loss, you know, really dialed in with the language that we use in our business, and our reports are very descriptive about what's going on in our small business finances, then we can really analyze that and look at what is worth your time and energy. What are you getting the most bang for your buck? And look at it that way. This also takes the pressure off of your business to solely support you until it's ready to so. In the beginning stages of a small business, you know you're burning the candle at both ends. You are burning the midnight oil. You know, you might be working more than 40 hours a week just to get things off the ground just to build up your customer client base and your book of business. And so, your business has a lot of pressure on it in the beginning, if you're relying on that solely to produce an income for you and there's nothing wrong with that. If your business is the only thing supporting you, that may mean that you show up a little bit more desperate and nobody likes desperate energy. And so, you may not be showing up in your business the way you truly want to. And in a confident sense that is going to attract the type of customers and clients that you want to work with. Because the difference between a business owner who is confident and doesn't need to take people's money and the business owner that needs to pay bills, you know, this one is taking on people or taking on clients or accepting payments from customers in a way that isn't aligned with their values and doesn't actually support them. What I mean by this is that you might be taking money from people you actually don't want to work with just because you have to pay your bills. So, showing up, not being desperate, not needing other people to hire you or to buy from you, means that you do the work that you want to be doing and you're not relying on your business making money from anybody to support you financially. So, the second part of this is that we want to find a suitable income stream for your business to support its main activity or we want to find another income stream for you that is separate from your business. So, there's two ways to look at this. We have income and revenue streams that are going to be complementary to your business. Now, so whatever you're doing for your business activity, however you make money, you are either providing a service or you're selling a product. We want to find ways that you can make money that are complementary to what you're already doing. So, a couple of ways that you could do this are seeking out partnerships or collaborations and this will help expand your reach, right? This could be a partnership or a collaboration with another business owner. This could be a collaboration with a larger brand, you know, and then you make income based on your platform. Or their platform. So, this kind of gets into, you know, content creation. You might be somebody that is providing services to other businesses, let's say marketing services and then maybe you also want to do content creation and create content that is going to be helpful and useful to other people. It's going to grow and expand your reach. It's going to want other people to collaborate with you and then you know, you become visible to their audience. So, content creation is something that's complementary to most businesses, but not everybody is suited to do that, and that is OK. We want to find something that is suitable to you that you actually are willing and want to do. The next thing that would be complementary to most businesses would be education. So, can you teach what you do in a unique way? That other people are going to pay dollars to learn from you? So, look into developing maybe continuing education courses for your industry or field. Maybe that requires registering with the licensing board for what you do and becoming somebody who is qualified to create, you know, continuing education, so that the people in your field can come and pay you to learn from you and you know that gives them the credits for continuing [education] that they need to like maintain their license. So, what does that process look like? This is something that you would need to research in advance. If you don't have a licensing board or something like that, you can just create educational material and distribute them or sell them. You know, if there's not somebody that you have to report to, like an agency or a board, or someone who certifies you for what you do, you can create education if you want to, there's probably not anybody stopping you from doing that. However, if you do have a license or professional license to main, you would want to go to the licensing people and say how do I become an educator in this field? I would like to create some courses, and can I get registered so that you know that would count towards everybody else's continuing education credits? And another way to be complementary to your business and revenue streams is that you could create a community or, you know, sell access to something that you can charge a subscription for. So, this would be recurring revenue and we'll talk about that in more detail in just a little bit. But having community or giving somebody access to something that they pay like a subscription. And then you could find income streams that are different from your business. So, this could be having another side hustle, and that sounds like a lot of work to me personally. But you know you can go get another side hustle. If your business started as a side hustle and then now you need to go find a side hustle to support your business that was your side hustle to begin with, you know that might be the case for you. But it is something that is unrelated to your small business. So, it's just another way for you to make cash. And you can support yourself financially so that that takes the pressure off of your business. You know, you can just go get a full-time job or a part-time job somewhere else and pay your personal bills with that. And we're going to take a quick break and we'll be right back. All right. And we're back. And let's move on to #3 of this podcast, diversifying to thrive. Let's talk about how we manage and scale multiple income streams in our business. So, I'm not talking about the things that are going to be different from your business. I'm talking about the income streams that you make within your business to complement the work that you already do. And we need to treat each one of these income streams like its own business, right? We need to have some sort of organization and a system for that income stream, whatever it is that you're doing, you're selling a subscription, you're selling classes where you teach other people to do what you do. We want to have that organized in a system. So, where are we tracking the income that you make from that revenue stream? Because guess what? If you don't have a way to track those numbers, none of this is going to be useful to you. You'll just be making extra cash, but you won't be able to analyze how that is actually supporting your business. So, we need to have a system to track it. What I like to do on the profit and loss statement is to show my clients what their different income and revenue streams are. Maybe you are an outdoor cleaning service maintenance company and so you have different cleaning services that you do for people's properties and you want to see which of these revenue streams is making the most bang for your buck for your time throughout the year So, you don't necessarily need to put each different service on a separate revenue line on your profit and loss. You might group them into major categories, but in a way that makes sense to you. So, if you use the same types of tools or supplies for a couple of different revenue streams, maybe make that its own category. Versus a different type of service that you provide that has like a specific piece of equipment that you need to use that you don't use for the other services. So, whatever way is going to make sense for you to split up those categories, let's put that on your chart of accounts as different income accounts. And let's break those out so that we can see on your reports what's happening with your different revenue. So, in order to scale your business, you need to have data and managing the data means that we've got buckets that each different type of revenue goes into, and that's how we're going to manage and track those numbers. This is also how you set goals. So, if you decide that you want to add a type of service to your revenue, to your business, and you're like, I want to sell five of these services every month. First of all, we need to have it set up on your chart of accounts, on your profit and loss, that you know where that revenue is going to go. Which bucket or which category is it going to go in? And then set a goal for that and then go sell it. Go sell five a month. Go sell ten a month. But we have a way to track it. We've set a goal and we know how we're going to look at that and measure that goal as we go along. So, defining what your categories are, what your different income streams are. Think about this in a way that isn't going to complicate things. You know, we don't need to have 10 different revenue streams on our profit and loss statement. Maybe you want to have two or three different categories that your different revenue streams feed into. For instance, I provide bookkeeping services to my small business clients, and so I have accounting service fees on my profit and loss statement. However, I also do consulting, so if somebody schedules a consultation with me, that is a paid consultation. Or I'm actually looking at their bookkeeping and we're discussing strategy and we're reviewing things together and preparing for their taxes. I want to see that under consulting fees. So, I have accounting fees and then I have consulting fees. Consulting fees are also whenever I do a training on QuickBooks Online, I put the revenue that I make from those trainings into consulting because to me that's not me doing accounting. That's me teaching you how to do your own bookkeeping. So those are the categories that I have that make sense to me, and that's how I want to see it on my profit and loss. So, use that as an example. This is going to be how you sit down and figure out, “What am I doing? Who am I doing it with?” You know, what kind of materials or supplies or equipment do I use for these different revenue streams and how can I break it up in a way that makes sense to me that I want to see my numbers in this specific way? Manage your different income streams the way that you manage everything else in your bookkeeping for your business. And then finally I want to talk about some real life examples of what I see other people doing for creating and diversifying different revenue streams to grow and scale their businesses. So, we have professional services. This could be real estate professionals whether you are renting or managing rental property or you're selling or you're a broker. We have people who are in advertising, and we've got people who are coaches. We've got lawyers and other accountants. All these people that are under professional services, let's talk about the ways that I see them creating different revenue streams to grow. So, they host workshops. This can be in person with their local Chamber of Commerce. This can be just simply marketed to people as hey, I'm posting a workshop about this specific law, and you can pay a fee to join my workshop. This can be webinars you know. This is something that I do. To teach people how to do their bookkeeping and to make it relatable in a way that they don't pay me as much as if I were doing it for them. Hosting webinars, once again, you can do this in person. I guess it wouldn't be called a webinar then but, you know, online in person. Or even, you could have a dynamic where you've had a hybrid, you could be teaching the class in person and also stream it online. And then you've got like master classes, people that are just basically saying I've mastered this thing in my business, and I want to teach other people how to do it, but this is going to expand your business. But it also provides value to your community, and this can be the community of people that you serve. This could be community with the other people in your industry or in your profession. So, what have you figured out that you want everyone to know and consider how can you teach this information? What might you want to charge for access to that information? And to access, you know, teaching the information to them. So that is something that you could do if you are in the professional services industry. So, apart from educating, you can also create a community. So, if you are teaching people how to do something, you're hosting master classes or webinars or workshops, and you have created educational content, you can create a community aspect of this where people who are, “your pupils”, for lack of a better term, people that have paid to be educated on your method, you can create a community for them to congregate. And so they can come in and work on the material together. They can network and share the experience of learning the material together. So, that would be something that would be like a subscription thing. So, if you wanted to give access to your community where you're going to be teaching content to them, you can charge them a subscription and so that would be recurring revenue for you. So, for people that do, like, routine services, like home maintenance, pest control, if you've got frequently recurring customers, you know, maybe you own a beauty salon and you have people coming in every couple of weeks to fill, you know, a new nail set or to get their color done every six weeks on their hair, you can develop a membership program and offer them discounted services if they pay to be in the membership. They pay the membership fees. So, this is, you know, another way to have recurring revenue. But you're also giving something back to your customers. So, if you're giving them a discount or they get their fourth, you know, hair treatment for free, whatever it is, you have recurring revenue. You've created a customer that is going to be loyal to you and your services and you still make money from that and you give them a discount. But once again, like, they could still pay you, even at a discounted rate. Maybe they get rewards for referring other people to come to you, too. For income that is apart from what your business is doing now, so, this would be like your side hustles: we're in a gig economy and we have been for quite some time, several years. So, do you have a special skill that you don't want to spend time marketing to people, but you want to get paid for it? So, you can check out apps that do the work of finding customers for you. So, these are apps like Task Rabbit or Fiverr. You can drive for Instacart or any of the other delivery services. You're just not having to find the customer. And by being a part of these apps, you know they're going to take out their service fees before you get paid. But the service fee goes towards developing the app, developing the network. And probably marketing to customers for you, finding the customer for you, handling the payment and all of that. So, these side hustles that you may have a skill that you want to do on task rabbit and you just don't want to be somebody that's out here marketing and networking and trying to find customers, you just sign up for the app and the app handles all of that. You just show up to somebody's house and do whatever tasks they need you to do. So, having a special skill and you don't want to spend time marketing it, and this has nothing to do with what you do in your business necessarily, this is just a little side hustle, you just want to make some extra cash on the side. So, that could be an example of, you know, something apart or different from the business services or products that you sell in your small business. So, in conclusion, we covered a lot today. I hope you found this information helpful. So, if you like what I shared on this podcast episode, I want you to please leave a rating or review and tell me your thoughts. And you can also come share any takeaways with me on my social media. All those links are in the show notes. I want to encourage you to explore what might be possible in your business beyond what you think you can do to make money now, because the reason that you haven't diversified your revenue yet or you're not making extra cash on the side is solely due to your belief that your options are limited. If you think you only have limited options, like, I can only see one client per hour, so I can, I only charge, you know, this much per hour and if I can only see one client then I'm only going to make this much an hour and so I'm capped at that. Believing that that's the case means that you're the one actually limiting your options, so I don't want you to limit yourself. You can Google people in your industry, see what other folks are doing, or just like you did whenever you started your business, recognize what need exists that you can fill in some way. You've already done this if you started a business, you saw a need out there. You were like, hey, I can satisfy that need. I can fill that gap. But it doesn't have to be one thing in your business that you provide or serve and that's it. That's the end all be all of it. You can keep going. You can do this again and again. You can come up with new ways to serve your community, to fill a need, to provide a product that people want. You can just rinse and repeat. Keep going and keep creating ways to serve others in your business. So, thanks so much for listening to this episode and I can't wait for you to tune in next week. Bye bye. Also, really quick because I have to give credit where credit is due, is that this whole concept and idea came to me because of the coaching that I've received from my sales coach Keli Lyn Jewel, because we all need to face the reality that in the starting phases and the starting years of our business, it might not be ready to support us financially. And so, I wanted to discuss this because I know that I work with a lot of people who are also in the startup phase of their business. So, thanks again to Keli for all of her wonderful coaching.