How to create multiple streams of income for your home business
For a first-time business owner, the Internet is like a treasure island…it can be a great adventure exploring new ways to make money. Sure, creating a website can be great fun, but if you want your online business to make you money, you need to think about more than just selling a product or service. Whether you have integrated your offline business with an online one or are a pure “web entrepreneur”, the key to increasing profits is diversification or generating multiple streams of income.
WHY SHOULD WE DO IT
In the new entrepreneurial era where most businesses are connected to the World Wide Web, the smart strategy for building wealth is diversification. With multiple streams of income, you not only avoid putting all your eggs in one basket, but you also create multiple sources of income so that when there’s a dip in one, the other is still around to keep the cash flow healthy. When you offer multiple related and complementary products and services to customers, you offer them more value and opportunities for repeat business. Not only that, diversification also means you spread your risks and minimize your marketing and customer acquisition costs. Offering multiple products and services gives your business the challenge and tension it needs to move forward.
Last but not least, creating a multifaceted business is also good for the owner’s creative spirit
TO GET THERE
Let’s start with an example. Let’s say you’re a small business owner that makes pet grooming tools. You are building a great website to market your products online to an existing and potential customer base, but you want to expand your sales and maximize your profits. Diversification into related product and service areas is just the idea for you. Here are some thoughts to get you started:
1. Sell your own products: You can sell your own product (pet grooming tools) earning the highest profit margin. This should be your main source of income, so be sure to focus on that first.
2. Sell related services: You can also sell a service that complements your products or that your customers may need before or after using your product. Your site selling pet grooming tools, for example, could offer grooming services and consultation with professional pet care providers.
3. Shipping Products: You can then find products available for shipping that complement your main product. Maybe the owners of your new pet groomer will need other items for their pets. Find a supplier that offers leashes, collars, food bowls and pet toys and arrange to have these products for sale on your site.
4. Recommend Affiliate Products: Why not recommend affiliate products that your customers will be interested in? You could set up a “Pet Care Resources” page on your site and use it to promote affiliate products related to pets and pet care, such as pet care books or magazines, dog food , expert advice on pet care, “ask the vet” or just about anything else pet owners would be interested in. (However, remember to keep your focus and avoid turning this page into a general flea market or end up you will lose traffic.)
5. Sell ad space: Try selling ad space to advertisers who are interested in your target market. A site that sells specialized pet services such as a kennel or pet hostel may be interested in advertising to pet owners, as it is usually a big deal for a vacationing family to leave their pet in safe hands.
6. Form a joint venture with similar businesses: Another option is to form a joint venture with other businesses. Coordinate your services with, say, a dog training agency. You could set up an arrangement where you earn a share of the profits from all sales you send to him. Then write a quick email promoting his service and send it to all your customers who live in his area.
7. Start an affiliate program: Finally, start an affiliate program to promote your site. You could sell yourself… but why would you? Think about it – you increase your visibility when your partners start promoting your site, you gain trust among your partners’ customers and you simply make more sales!
You can get more ideas at: http://developers.evrsoft.com/article/web-development/miscellaneous/how-to-leverage-your-curr.shtml
that’s not all You can extract additional sales from existing customers by investing in customer relationship management and data mining. Data mining systems allow companies to target a wide range of customers with common buying characteristics, as well as narrow down the target to individual customers. Targeted email, for example, is more effective than broadcast email. Companies like Amazon.com do a great job of offering choices based on past product purchases.
Another major source of new revenue for an online company is ‘Digital Content’. Digital content is basically a type of information that can be downloaded by the user for a fee. Digital content ranges from music, movies, photos, news and information, interactive multiplayer games, books, magazines, and almost anything else that can be digitized. Revenue can come from pay-per-use subscription or download purchase.
For the imaginative business owner, the possibilities for creating new revenue streams are limitless. Variety is great; diversifying is fun, but you have to be careful here. You need to further ensure that your revenue channels complement each other and that you never, ever forget your core customer base. These were the first people to buy from you, and they are still the most likely to return with repeat orders.
Generating multiple streams of income is the most logical solution to turning your online investments into a profitable and sustainable business. Let your imagination run wild, plan in detail and be prepared to work really hard; having 3 sources of income compared to one never hurt anyone!
See also: http://www.powerhomebiz.com/vol116/revenue.htm
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