Running your business comes with so many plus points. You can be your boss and let things go the way you want it. Your small business can be exciting and energizing, but at the same time, it can be thrilling as well.
Sole entrepreneurship comes with so much responsibility and you are the only one who is thinking about the costs and revenues. You enjoy profits alone, but you also bear the loss alone. Most experienced business owners say that running a small business or a new start-up is not easy, and it never works out the way entrepreneurs have expected.
Experts suggest that every small business person should have multiple income streams and never rely on one source only. The reason is that if things go bad in one niche, the business can do better in the other area. Similarly, the business owner can earn from other things too.
Pareto Rule For Analyzing The Business
If you are running your small business, you must have heard about the Pareto Rule. It is one of the important rules when starting something small but expecting big out of it. This rule says that important things or tasks should be divided into a 20/80 split.
Talking about the business particularly, you can say that 20 percent of the products generate 80 percent of the profits or 20 percent of the workers are bringing in revenues for the 80 percent of the sales.
Importance of Pareto Rule for small businesses:
The rule lets you analyze where the money is coming from in the business or which area is generating more revenues. It also lets you analyze the sales. This rule lets a business owner analyze which niche needs more effort and which one is generating more revenues.
It’s Time To Invest In Multiple Income Streams
If you want to be a safe entrepreneur, it is time to invest in multiple income streams. Get ready for diversification. If your business is already doing well in one niche, you might question why diversification?
Let us explain through an example. Consider if a business is earning £5,000 per month from a single niche, it is at a much riskier position if its position is compared to a business that is earning £5,000 per month from multiple sources.
In the case of the first business, if the customers take a new direction and stop purchasing the business products or services, it can be in hot waters. On the other hand, the second business can still earn from other sources if one is not doing well in the market.
Consider if a small business has only one mainstream of income and it is doing quite well. However, if you want to earn more out of your limited investment, here are the ideas.
1. Training
You are running a small business, which means you have the required skills to run a business; why don’t you think of cashing it? Yes, you read it right! You can cash your skills and knowledge.
Remember, you can be a mentor for many people out there who want to be like you and learn from your shared experiences. So this is the right time to deliver training to the right people in the most innovative way.
There are many platforms online that you can use for training people. Udemy is one good option. You can also start your YouTube channel and earn. Once you record your course and training videos, upload them and have a continuous income stream.
2. Trading Stock
Trading stock is another best way to make money if you have some savings. The world of the stock market is booming, and you can make a handsome amount while sitting at home.
However, it is important to first collect enough knowledge of the stock market before putting your money into it. Invest in stocks that are related to your industry so to take advantage of your wisdom and experience. If invested correctly, trading stocks can bring you profits each quarter.
3. Write About What You Know
Why don’t you write about what you know already and turn it into a new income source?
Some publications would pay you for well-founded sources of information. Technical subjects like accounting, Finance, Mathematics, the law or computer sciences, and Marketing plan developers are paid more.
Try your luck at Fiver, Upwork, and People per Hour for work. These platforms provide loads of work on a daily basis for a stable income stream.
4. Consulting
Consulting is a good way to earn additional income. You can offer consultation services to guide individuals or businesses on how to get established and successful.
For instance, If you an HR person, you can give consultancy to businesses on how to manage their workforce and keep them loyal to the company. Similarly, Marketing personal can make marketing plans for businesses. A psychologist can run his online clinic to give consultancy to depressed people.
In the same way, if you are a developer, you can help your community or other small businesses develop apps such as one for prayer times, grocery shopping, and managing their budget, etc.
5. Franchise Your Initial Start-Up
If your business is an established one, it is a good idea to have multiple income streams. Most of the successful businesses world-wide have either given franchises or are franchises. This way, not only are you earning well, but you are also helping others.
Is It Worth Starting Multiple Income Streams?
Of course, developing multiple income sources is the best way to be a successful businessman. Even if one of your businesses is not doing well, you shall have other options to bring in revenues. If your business is not doing well in one area, you can still receive cash from other areas.
Think for a moment that you are already running a small business, doing the above options besides your streamlined business, and each of them just brings in £1500 per month. That is the extra money that you are getting for yourself or even your family. You can also use this extra income from multiple sources for the development of your business.
Final Thoughts
Running a small business comes with so many uncertainties. Working on your timings is fun, but worrying about the profits and loss is not that easy. If you are an entrepreneur, we would suggest that you never rely on the income of your business alone and always seek multiple income sources.
Multiple sources of income are essential because if your business is not generating revenues in one area, the other areas are still paying you well. Besides, also invest in the above ideas to bring in cash that you not only use for yourself but can also invest in your business for growth.
Whatever multiple income sources you choose, remember to consider the Pareto analysis now and make sure you divide your risk!