When you’re running your own small business, it can be easy to get really invested in one or two areas of the business and focus all your time and effort on them. After all, they may be the most profitable or offer the highest return on investment, but that doesn’t mean they should be your only source of income. By diversifying your income streams, you give yourself more opportunities to succeed, build up your savings account, and protect yourself if any one area of your business fails or hits hard times.
There is no one thing
While having a single, streamlined focus can make your business easier to run and manage, it also puts your company at risk. If you have all of your eggs in one basket, there’s little chance for growth or expansion. The best small businesses are willing to be flexible and realize that no one business model is perfect—but that doesn’t mean you should be willing to let any opportunity pass you by. Instead, think about how you can adapt to changing circumstances; if something isn’t working, don’t give up on it entirely. Instead, try focusing on different aspects of your business and finding ways to improve them. This could mean shifting gears entirely or simply tweaking an existing strategy until it begins working again.
Each project will likely provide new skills
When you’re a sole proprietor, it’s up to you to keep your business moving forward. This means everything from scoping out new products or services, to developing strategic partnerships and relationships, to handling marketing efforts, social media interactions and more. If you have more than one focus for your small business, you can rotate through different tasks so that each month sees growth in a different area. With small businesses involved in multiple sectors on a rotating basis, opportunities for improved skills are endless. Multiple streams of potential customers and diversified products or services might mean different customers come for different experiences and this gives you more people to market to, a bigger pool of potential clients and a wider income stream.
If one source dries up, there are others to fall back on
When you diversify your product or service offerings, you create additional sources of revenue. In other words, if one source dries up for whatever reason—perhaps a competitor entered your market or maybe an economic downturn has forced customers to tighten their purse strings—you’ll have other products and services to fall back on. This strategy not only makes your business more resilient but also gives you less of a reason to worry when things aren’t going as planned. Covid meant a lot of small business owners had no choice but to look outside of their traditional product or service, look for new ways to bring in income. This idea of multiple different branches to your business in verying areas could be the difference between weathering a storm or sinking.
Embrace networking opportunities
Whether you’re actively seeking a new opportunity or just trying to expand your professional network, networking is one of the most important things you can do as a small business owner. Everyone knows at least 10 people—and usually a lot more—so it should be relatively easy to get referrals and recommendations. Networking events can also expose you to new potential partnerships that may increase your revenue and help you grow your business.
Diversification can come from many different routes. You can diversify you product, network with people that provide complementary products that your clients will love and strike a deal. Diversify a service, networking might introduce you to new skills or new services you hadnt considered offering before. Diversify your client base or maketing, networking may give you a new potential pool of clients and new ideas to market to them. Always think about where your ideal clients may be hanging out, what else they like to buy, what else they like to do and think too about what other types of clients might like your product or service.
Don’t get complacent with limited numbers of clients
The vast majority of small businesses will tell you that it’s essential to diversify your customer base, and for good reason. The beauty of having multiple streams of income is that if one dries up for whatever reason, you’ll still have others bringing money into your business. It could be due to a seasonal change or even a change in demand from those specific clients—either way, it’s important to ensure that you’re not over-reliant on any one type of client.
Not only does it help with cash flow, but also with reducing stress. If you know that all of your work comes from just one source, then when things go wrong (and they inevitably do), you’ll be left feeling anxious about how to fix them. But when there are other sources of income coming in, then you can take a step back and breathe easier knowing that everything will be okay—even if something goes wrong with one particular stream of revenue.
Don’t be lazy about marketing your secondary services.
It’s a common misconception that small businesses don’t have time to market. While it’s true that small businesses are often very busy and strapped for cash, there are actually some simple steps you can take to get more people coming through your door or contacting you about potential business relationships. For example, consider sharing contact information with other businesses, like complementary partners or nearby competitors, so they can refer customers to you. Market you add on services, product ranges or you new revenue stream as if it is your only business, treat those things a business in their own right and they will start to shoulder some of the burden!
To find out about how Savvy can support you in selling additional product ranges in our online shops or using check in forms to sell additional complimentary services, book a demo today! (https://calendly.com/savvydemos/savvy-demo?month=2022-08https://calendly.com/savvydemos/savvy-demo?month=2022-08)
If you’d like to see how Savvy have “diversified” and support us in our journey, check out our add ons in settings – subscriptions – add ons, think about switching to using Savvy Pay and tell all your friends about other Savvy platforms for the beauty, hair, nails, photography, tattoo and barber industries.
Rest assured that we totally embrace diversification and in doing so makes your software of choice far more resilient and strong!
