Running a business comes with a lot high and low moments. There are various factors we can’t control. Such as extreme weather, stock market tanking, global pandemic, or even dollar valuation fluctuations. On the positive side, there are several ways to generate new small business revenue streams. If done correctly, you can increase the chances of success, regardless of external factors, while searching for passive income for small businesses.
As entrepreneurs, we know not to keep our eggs in one basket. We will always need to work on discovering additional revenue sources that will bring more money to our companies.
Before evaluate each of the 8 alternative revenue streams, we must first explore the internal details of adding revenue. It’s essential to understand why multiple revenue streams are crucial to your business’s long-term success.
Let’s get started.
Multiple Revenue Streams and Growth
In the wake of COVID-19, many businesses have had to significantly modify or even temporarily shut down their daily operations. In tough times such as these, finding new revenue streams can be a great way to make up for the lost income and keep the company afloat.
With the pandemic, thousands of small businesses across the globe had to pivot their business model and revenue streams to remain afloat.
But, even if we set aside the pandemic, diversifying your small business’s income sources is crucial to your success and can give your business the longevity to sustain itself. If you’re just relying on a single product or service, that can leave you vulnerable when sales or new opportunities dry up. In a business, this can happen overnight. This can happen regardless of how great things are going right now. You can never get too comfortable.
With thousands of new businesses entering the market each year, we know that the competition is only going to get tougher. When you aren’t utilizing your resources to generate new income, you can potentially lose out on reaching the full potential of your company. You must learn to earn money for your business without complications.
The preferences and patterns of your customers will also evolve. Your customers could have been loving your body butter, but now their preference is essential oils. If your business doesn’t diversify, you will be crossing a tricky line.
With this being said don’t be afraid of trying new things; be afraid of losing business because you didn’t adapt.
Benefits of Diversifying Your Income Streams
Obtaining several sources of income will get your business that much closer to becoming financially independent. Let’s dissect the three main benefits of the 8 ways to generate new small business revenue streams and earn money for your business.
Greater Stability
It is important to make sure that your main business is mature and developed enough before you start focusing on diversifying your income streams. Always good to have an ambitious attitude and seek new sources of growth.
Having multiple sources of income can decrease your risk of losing it all. If the business to which you’re dedicating all your efforts to fails, you will lose your only source of income, and be left empty-handed. When you have several sources of steady income, that worry is vastly reduced.
Scaling Faster
This benefit can be very obvious for revenue streams for handmade business. If you have different income streams, you will have higher amounts of money. This will allow you to invest more in your primary business and in your other new sources of income. By doing this, your business will start scaling effortlessly.
Expand Without Spending More
The ideal scenario for any business is to be able to expand income without increasing it’s outgoings. Diversification of revenue streams is a great way to achieve this. It can be more about using wasted resources than investing more money into the business. Depending on the path you want to take, this option can either help you tap into exciting new markets to take advantage of high growth potential, or it can simply fill a niche that satisfies your existing customer base.
Ways to Generate New Small Business Revenue Streams
There is no one-size-fits-all formula for this journey. It’s all about adapting and finding what works for your needs and goals. That is the first fact you should understand before anything else.
Create New Products and Services
Creating new products to drive alternate sources of revenue is always an intelligent way to begin. Instead of doing something completely unrelated to your current offerings, think about complementary products or services that can be launched.
Creating and launching new products comes with a deep understanding of what your customers are looking for and what’s currently in the market. Consider the following while increasing revenue streams for handmade businesses:
- What’s trending in the market? Read industry blogs, speak to existing customers, read your product reviews, and research competitors to get insights on what might be the next big thing.
- Who is going to be my audience? Remember, product expansion doesn’t always mean targeting a previous customer. Your product could be for a brand-new audience, look into who can be another type of potential customer. Do deep research on what products they like, hobbies of interest, who they follow, etc., to have a clear idea of who is going to be your target.
- What problems are my customers facing? Can a new offering resolve your customer’s needs? Find that information out and come up with an answer!
- What matches my existing inventory, finances, and skills? No company has infinite sources. Consider which existing resources you can use to launch a new product or service. Do you have the skills to launch a new product? Ask yourself that.
Also, develop a clear budget for the new line. A good thought to have in mind is to “work smarter, not harder”. Add something extra to your business that doesn’t take too much of your time or resources in order to keep up with your current tasks.
Sell online and Globalize Your Brand
You can accomplish this by having an eCommerce website with a robust platform or mobile app. With these online sales platforms, you can also add a global aspect to your business by expanding into international markets.
You can quickly transform your small business from local to national, and even global. With all the benefits that technology gives us, this idea can be super easy to apply and can bring significant growth to your business. You already have all the required conditions for these. Local success will tell you that you can quickly expand your business in other places. Similar to the basic one where you have started your company.
Selling at the national level will generate more revenue than selling locally. By selling at the global level, you will generate more revenue than selling nationally, and so on and so forth.
Create a clear and attractive home page that showcases who you are, what you do, and what you’re all about. Then, begin building out your brand with a strong mission statement and tagline that resonate with the niche you’re targeting. You can add value to your visitors through your site’s content. This includes blogs, product descriptions, case studies, and podcasts. The point is to make sure you provide your visitors with the information they need to make an informed decision.
Become an Affiliate Business
You can also set up an affiliate marketing program and earn passive income through. In affiliate marketing, you’ll promote products/services via specialized (affiliate) links. If a customer purchases the other product you’re promoting, your business gets a commission. The more you sell, the more commissions you make, thus generating alternative ways to generate new small business revenue streams.
There are affiliate programs across industries that can help brands with passive income for small businesses. You just need to make sure to find products that align and are well-suited for your business. The key with an affiliate marketing program is to promote products or services so that you can have an honest review about it. Speak about it naturally to gain your customer’s trust.
Offer Online Training Programs
Go online and offer expert courses related to your products and services. These courses will allow your customers or other industry members to achieve operational knowledge of your products or services.
Offering training courses that help people improve their skills. Describe how your users will become more proficient at using your product as an extra income stream. These courses can be sold either separately or bundled together into packages.
How can you build an online training program?
- Start small and get a feel for the content creation process.
- Find your audience. What problem will your training course address? What it’s the value proposition?
- Keep videos short and simple (max 2-3 minutes). Your iPhone is powerful enough to shoot these professional-looking videos.
- Edit with iMovie or VideoHive. Add captions and transcripts.
- Upload courses to your website or to a marketplace.
Our recommendation is to go a step further and link these training session videos to your business’s YouTube channel. This will further drive traffic and revenue to your company.
Develop New Business Partnerships
Many times creating ways to generate new small business revenue streams doesn’t require going online or creating new offerings. It could be about presenting existing products or services to new customers via partnerships and collaborations.
Partnerships with companies that have complementary products or services are an easy way to capture opportunities you may have never been exposed to. They also offer your customers increased value. It’s a simple idea that can open you doors to new customers while differentiating yourself from competitors.
You don’t need to partner with the biggest companies. Be strategic and consider partnering with other local small businesses that will be receptive to joining forces. Find local businesses via Facebook Pages, Instagram, TikTok, Google My Business, etc.
A few things to do that can help you set up a successful partnership are:
- Identify the goal of the partnership. Is it a sales partnership? Or an affiliate program?
- Write down who would be your ideal partner. What sort of business are they currently doing? What markets are they in? Jot down what you don’t want in a partner, as well.
- Form a partnership agreement that outlines responsibilities, income distribution, and duration of the deal.
- Equip your partner with your sales pitch, training guide, and other key customer insights. This will set them up for success and have a better understanding of what your business is about. Show them how can you create something that can be beneficial to both businesses.
Add a Subscription Model
Subscription models are trending across all industries. For customers, a subscription service brings convenience and affordability. For businesses, adding a subscription service creates a new revenue stream. One that leverages existing customer relationships into a steady income. Since your customers will be paying regularly or upfront, you’ll be able to predict revenue accurately.
To give you some guidance on how to do this, look at the products or services you offer. See how you might be able to bundle them as a value-packed offer. Include special bonus content for users that sign up for a subscription. This can be done by waiving shipping fees or adding a free sampler product.
Think about pricing. A subscription model is popular because it is affordable to the customer. Conduct a few customer surveys before you set a price. And lastly, figure out delivery if your subscription box is product based. Is there a delivery service you can partner with for local orders? If you or your customer is out of state, which logistics businesses suit your budget and needs?
You can design a subscription group in a number of ways; the choice is yours. What is certain is that it’s one of the fastest ways to generate additional revenue.
Listen to Your Customers
If you want fresh ideas that will enable you to create new revenue streams for your small business quickly, you can use your current customer’s feedback. This will tell you what they would like to see from your company in the future. It’s easier to create something by having this valuable information. If you create and deliver what your customers want, you will increase the revenue for your company.
To learn how to create a positive customer experience, all you must do is speak directly to your audience. This will give insight into what your target market wants and needs from you. Plus, you will now be able to gather some ideas for future offerings, and can see if any products need revision or improvement.
Asking your customers and listening to them about what they want and need will help you increase the probability of success for your newly created revenue streams.
Reward Loyal Customers
You can use the tactic above to reward your loyal customers. Send them updates about new launches and special offers through website updates, specific email campaigns, and newsletters.
Sending an appreciation gesture, such as special discounts and freebies, will lead your past customers and clients to their next purchase. This will also give them the impression that they are important to you. Stay in touch! It could be via newsletters, holiday cards, or reminder emails. After every visit, send a follow-up with your customers. This way your business stays at the top of their mind.
The Bottom Line
There are multiple ways to generate new small business revenue streams. All of which require little, consistent steps. It’s in your hands to identify the most appropriate strategy and make a plan to tap into that opportunity. Take time to get this right, and be the first to witness your small business flourish.
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