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Small business owner diaries: Diversifying your revenue streams with SumUp Academy
As a small business owner, it's important to find ways to protect yourself, and your brand.
A key way to do this is by adding multiple revenue (or income) streams where you can, so that you have income to fall back on should one area of your business suddenly disappear.
This is a topic our founder, Tabara, has been thinking a lot about recently, and we're excited to share that she's recently teamed up with SumUp Academy to share her tips and tricks so that you can diversify, too.
Got questions on how to do it? Didn't catch the IGTV? No worries, we've got you covered.
Here's what Tabara had to say. Notebooks at the ready!
What are revenue streams?
I have this quote printed in my office that says "Don’t put all your eggs in one basket", and that’s my approach to revenue streams. A fitting quote, right?
Revenue streams are, in short, all the different sources of revenue a business or an individual has, the multiple ways you can make money for your business.
For a product-based brand like La Basketry, my main revenue stream is my online shop, but a second revenue stream could be marketplaces, selling on websites like Not On The High Street or Etsy, or selling in a wholesale capacity.
I wrote a book 2 years ago and the royalties I get from that are another revenue stream, too.
Other revenue streams you may be familiar with are things like:
- Experiences and events
- Subscription boxes like beauty boxes or flower deliveries
- Digital products like an e-book with recipes, a course, craft tutorials
- Affiliate links and referrals, where you get a percentage of a sale every time someone uses your unique link
- Commissions and special projects
So overall they are all the ways you generate money regardless of your business model, you just need to think a little creatively!
One of the huge benefits of revenue streams is that you are not just relying on one thing, so it takes off the pressure if your online sales are slowing down in the summer, for example.
Having different revenue streams improves your cash flow and is a brilliant way to test new ideas with your audience.
How do you identify new revenue streams?
1. Data, data, data!
To get started, you need to gather a bit of of data and knowledge on your audience to find out what they resonate with, and what they want to see from you.
Look at Insights on Instagram and the stats of your website through Google Analytics to see what's doing well (and not so well). You don’t want to stray too far from your current offering, stay true to your core business. Remember you want to serve your customers the best way you can, always.
A quick idea: Sell a related product - at La Basketry we started with a craft book and we have since expanded to craft supplies and DIY Kits.
2. Get creative
Rethink ways you can use your current resources and skills to create entirely new products or services. Remember how alcohol brands started producing hand sanitisers during lockdown?
If you are a craft business, can you start sharing tutorials on your website? Or start building a catalogue of downloadable pdfs? Items like this could lead to collaborations with brands, or affiliates and referral links to other websites where people could buy the supplies needed to complete your tutorial.
A quick idea: Make a list of your resources and mind map how you could use them in new ways. Write down everything you can think of, you may have plenty of resources already at your fingertips.
Do you have to invest lots of money to start new revenue streams?
No!
It’s like with everything, you always want test the waters first, and it depends what you decide to focus on. (Referring back to that mind map and your data will help you, here.)
It really depends on what you focus on. Digital products like e-books and pdf downloads can be a great cost-efficient starting point if you're not ready to test out a new physical product.
Trade carefully, test ideas, tease new ideas to your audience, offer freebies to begin with and see what the response is like and if there's enough interest for something bigger.
How many revenue streams should I have? Do you think revenue streams are for all businesses?
There are unlimited routes of revenue streams, but it all depends on how adaptable you are.
Do you want to be the face of your brand? Do you want to stay behind the scenes? Can you host events or would you rather not?
It’s almost like seeing your business as an umbrella, and all the different things that can come down from the core of it.
There’s a myth that every entrepreneur should have 7 revenue streams, but I don't buy it! Just do what feels right for you, and start small. You can always add more in the future as you build your brand and your customer base.
Do you worry your business could become too sales focused and less driven by passion?
If you choose to run a business, it does become a sales job because it will be your main income, so its about finding the right balance and what feels right.
I think it’s important to push yourself out of your comfort zone and trial new things, but always keep in mind the core of your business and why you started it to begin with.
Do you think you'll be adding new revenue streams to your business? Come and let us know on Instagram!