When you become a full-time business owner, your business brings the bread and water to your dinner table. You can’t afford months where no income comes in. You may also find it difficult to tend to high priority occurences (kids getting sick, wife having a baby, mom getting surgery, etc.) if it takes away your working time unless you know how to make multiple streams of income. In this article we’ll be talking about diversifying income streams and creating businesses with multiple streams of income.
- 1 My Story
- 2 What are Multiple Streams of Income?
- 3 How To Multiple Streams of Income?
- 4 What is Smart Passive Income?
- 5 Busting The Myths of Smart Passive Income
- 6 The Benefits of Smart Passive Income
- 7 Multiple Streams of Income and Wealth Accumulation
- 8 How To Make Multiple Streams of Income Ideas
- 9 Final Words on How To Make Multiple Streams of Income
- 10 Now, it’s Your Turn…
I had been running my business for almost one full year when my son got sick. He was very sick for 8 weeks, and taking care of him became my #1 priority. Unfortunately, I received my primary income stream by working from home as a freelancer. I had 2-3 clients.
For my largest contract, I started out doing digital marketing, and with time, my role became broader, and turned into a virtual assistant position. I had alot of responsibility, and my client’s business could not withstand my absense while I cared for my son, so I lost the contract that supplied 50% of my business income.
It was a hard hit.
After that hit, I decided to create more streams of income, so I can have the freedom to make decisions (as I had) without a huge loss of income, or the pressure of thinking “how am I going to pay for this or that?”. Of course, saving money is another key peice to this, but in my scenario, I created hospital bills galore, and exhausted my savings paying medical expenses, then on top of that, I lost a huge chunk of my income.
I’m writing this article to prevent the same tragedy from happening to you. When you start a business, you do it to create a better life for your family, not so you’ll experience instability and struggle financially. Unfortunately, you don’t have true stability unless: 1) The demand is high and supply is low for your niche products/services, and even when that is the case, you still add more stability by, 2.) Creating multiple streams of income.
What are Multiple Streams of Income?
The literal terminology, “multiple streams” is an analogy where income is being compared to waterways. The idea is that money is consistently flowing from small waterways (income sources), and collecting into one large body of water (your investment or bank account).
You want your income to flow consistently like water streams. Can you imagine how much peace that could bring to you, your family, and those working for you if your business income was stable enough to compare it to waterways, rivers, or oceans?
There are multiple ways you can diversify your product and service offerings to create multiple streams of income. You can offer your services (as I had), create products, refer people to other’s products/services (affiliate marketing), invest and gain dividends, `invest in residual income opportunities, and set up many more “streams” of income to stabilitize your money. Let’s talk about this further…
How To Multiple Streams of Income?
There’s many ways to develop multiple streams of income. Often times, as business owners, we focus on offering products or services, and forget to diversify. Diversifying doesn’t mean to be a restaurant owner who owns a toy store.
You can diversify within your own niche and keep the risk level fairly low. In fact, I would recommend diversifying within your niche rather than trying to run businesses in multiple niches. For most people, the risk level of running businesses in multiple niches is too high especially for startup entrepreneurs.
There’s so much “inner circle” information for each niche, there’s connections you have to make, and other practices you have to put in place to make a business work. I suggest focusing on making one business work at a time, and don’t branch into other industries until you have the time to saturate yourself in learning the new industry, and the money to stabilize everything you were doing before.
Example One: The Writer
The writer typically thinks of making their primary income by offering their writing as a service or as a product (blog post, book, etc.). To create multiple streams of income, you want to ask:
- Who is the audience of the writer?
- How could the writer effectively communicate her message to more people?
- Could they be more effective by making their content for visual, kinesthetic, and auditory learners? If so, how can the writer make their content appeal to different learning styles?
Once you’ve asked those questions, you can come up with many ideas for how the writer could appeal to a wider audience. Here’s a few:
- Offer their services as a freelancer (ghostwriter, copywriter, blog writer, or whichever is their niche writing style)
- Create a blog where they write about their niche
- Write and publish books
- Refer others to products and services by adding affiliate marketing into their writing
- Create audiobooks by narrating themselves or doing royalty share agreements with narrators
- Create products that teach others the topics from their books (courses,etc.)
- Create products or licensing agreements to expand the brand. For example, Harry Potter has movies, keychains, toys, etc.
- Do public speaking. You can do book signings, speaking to groups, webinars, or create a Youtube channel around your niche.
- Create tourist opportunities around your niche. For example, Disney created an amuzement park, holocaust survivors have created museums, artists have created galleries. Using real estate and creating tourist opportunities is a higher investment cost, but it is a way to add a stream of income into a writer’s business.
By now, you can see there are many opportunities for a writer to create muliple streams of income, and each added stream adds more and more stability and income potential.
I’m choosing the General Contractor to show that even businesses that rely heavily on physical labor can diversify. General contractors typically get paid to perform handyman services, home renovations, and real estate repairs. Many of them don’t diversify, so when they get injured or need to take time away from being on site, it can be very damaging to their incomes. Similar to the writer, the General Contractor can also create multiple streams of income. Let’s brainstorm some opportunities:
- Offer consultations to DIYers
- They can get paid for referrals. Some people will want to do their own projects, but would want product recommendations from a professional. General contractors can participate in affiliate marketing and get paid commissions for referring people to products and services.
- Create a profitable website. Adding onto the previous idea about affiliate marketing, general contractors can add their product and service recommendations onto their website, so when customers ask, they can have them look at their website, and they can get added traffic from the search engines.
- They can rent their tools
- They can offer training to DIYers or up and coming contractors
- They can get paid to offer feedback to other contracting companies
- They can create intellectual property: patent ideas, write books, license their name to be used on products, or create products that improve their industries
- They can fix and flip properties or buy and hold properties
There are many opportunities for General Contractors or business owners of all types to create multiple streams of income.
Hopefully, those two examples (the writer and the general contractor) can help get your ideas flowing about how to develop multiple streams of income for your business.
What is Smart Passive Income?
When you’re brainstorming how to create multiple streams of income in your business, you want to make sure you add earned income streams and smart passive income streams. Not only is Smart Passive Income Pat Flynn’s business, it’s also a way to create multiple streams of income to solidify your business.
Smart passive income is investing in something that created returns later: time and time again. Some examples of smart passive income sources are:
- Intellectual Property royalties
- Website income
- Affiliate Marketing
- Real Estate
- Stock and investment dividends
- Venture Capital Investing
- Peer-to-Peer Lending
- and, there’s more…
Busting The Myths of Smart Passive Income
Passive income is not work-free. Many people paint passive income as if it doesn’t require work. Often times, passive income requires more work than earned income up front, but the benefit is long term. For example, in my article, Seven Figures in Seven Years, I talked about living below your means and saving at a high percentage in comparison to your income.
The case study I used was a case study on Michael Masterson. He was a pretty average guy who decided to achieve more, but started out with a job earning $35,000/year. The strategy details of how he got his raise are in the article, but ultimately, he doubled his income by adding more value to his employer.
After he got a huge raise from $35,000/year to $70,000/year, he chose to maintain his previous expenses, and save something like 50%+ of his income. He added multiple streams of income and diversified, and had $670,000 saved. After, 7 years of savings $35,000 or more, he’d have high dividends from a savings account with $670,000, but that was only one potential stream of income!
This would be enough for most people to live off of for 10 or more years! In order to make it to seven figures in seven years, he saved aggressively, and added side hustles. Are you starting to see the potential of creating multiple streams of income?
The Benefits of Smart Passive Income
Having multiple streams of income makes wealth accumulation possible.
The passive income he could withdraw monthly from his investment portfolio wasn’t absent of hard work, but it could pay him residually for years. When I mention diversification and creating multiple streams of income, I’m not saying to avoid work.
In contrast, I’m saying to plan out your time now where you divide your work time to create earned income streams and passive income streams: some time-based or fixed-rate work and some commission-based work.
Multiple Streams of Income and Wealth Accumulation
If you watch closely, most wealthy people are able to become wealthy by creating multiple streams of income. Take a look at some income reports like these, and you’ll see several income line items.
You see products, services, affiliate income, ad revenue, sponsorship deals, and other revenue sources, and when added together, it equals a REALLY NICE PAYCHECK! I don’t know many companies who would pay one person the same paychecks that could be achieved by creating multiple streams of income. Do you? It’s totally possible to make big bucks using the power of creating multiple streams of income.
How To Make Multiple Streams of Income Ideas
To create multiple streams of income ideas, you can do several different things. You can:
- Ask your target audience ways you can be more helpful to them besides your current primary offering
- You can do market research, see what others in your niche are doing to diversify
- You can read about passive income and see if any options are something you can do
- One easy way to create multiple streams of income is to take your business or idea online. Right now, taking a business online is low upfront cost and fairly easy to startup. I’d love to help you with this!
- You can also hire a business consultant (like me) to help create multiple streams of income ideas
If none of these options has your “wheels spinning” yet, maybe you’d get some ideas by checking out my articles 25+ Home-Based Businesses for Stay Home Moms or 25+ Side Hustles You Can Start with Low Upfront Investment.
Final Words on How To Make Multiple Streams of Income
The goal of this article was to show you the importance of creating multiple streams of income, and also to encourage you with ways to brainstorm multiple streams of income ideas. Hopefully, you can learn from stories like mine where having one primary stream of income can be sweeped right from under you, and you use that example as fuel to diversify in your business.
Regardless of the size or age of your business, it’s always best to have multiple streams of income. If you have questions or concerns about this, don’t hesistate to leave them in the comments section. I’d love to help you out!
- If you’d like to diversify your business income online, that’s an area where I have lots of expertise and a great community. I’d love to invite you to join me at Wealthy Affiliate where I can walk alongside you thru your training program that will teach you how to diversify online. You’ll learn affiliate marketing, advertising, content curation, search engine ranking, and so so so much more.
- If you’re in the pre-startup or startup phases of your business, I’d love if you’d enroll in myFREE “How to Start a Business in 10 Simple Steps” Intense Bootcamp HERE. It’s quite an aggressive program, but it’ll give you everything you’ll need to hit the ground running with your new business, and start making some money!
- Finally, if you’d like customized advice on your business, I offer business consulting services. You can schedule a consultation HERE, and I’d be glad to meet you and interact.
Now, it’s Your Turn…
Have you created multiple streams of income in your business? How’d you do it? Do you have any exercises or ideas you use to create multiple streams of income ideas? What are they? Did I leave anything out that you’d like to add? Leave you comments, questions, and concerns below. I’d love to hear!