Hear this: revenue diversification is a need, not a want. It’s an absolute non-negotiable. Here’s why:
- Growing and scaling your business is how you go from survive (getting by) to drive (taking it to the next level) to thrive (basking in success).
- One word: Covid. Unless you can foresee the future, you never know what circumstance, trend, or global pandemic could blow up your business if you only have one audience and/or one offering.
So, how many revenue streams do you need? Three to five, according to economists after the 2008 recession. That way, if one stream takes a hit, the others continue to function. If there’s only one, it’s game over. Just ask Toys ‘R’ Us (remember them?).
The once bustling company refused to move with the times. You know, when people started shopping online. They didn’t want to diversify their revenue to online sales, so they outsourced it—to Amazon. Oops. That was the beginning of their end. If you don’t want to go the way of Toys ‘R’ Us, you have to diversify.
Three ways to diversify your revenue
1. Package your deliverables differently to attract different targets.
That way, if one target comes under pressure, you have others to keep the cash flowing. Here’s an example:
A marketing firm that had an emphasis on restaurants diversified to grocery stores in 2019. It was a relatively easy pivot because the two markets required similar marketing strategies. Then—Covid. Of course, we all know what happened after that. Restaurants collapsed and grocery stores became the hero. Diversifying their target kept that firm’s business going despite the restaurant stream running dry.
2. Diversify the services you offer.
To do this, you could:
- Offer different deliverable to your default target (otherwise known as your zone of confidence)
- Offer a totally different deliverable to a different target.
That different target could be a stretch market, which should be outside of your comfort zoneX, but not so far out that it hurts.It also could be a hail mary, which is that target that you really, really, really want to pursue, even though you haven’t yet determined its viability.
To be successful in these endeavors, you need to allocate your resources (time, money, people) appropriately. Here’s the formula:
Default
Stretch
Hail Mary
If you’re not sure you have the skills to diversify your service offerings, don’t be afraid to bring in a subcontractor who does. Yes, this will feel uncomfortable to female founders. But here’s the thing, you don’t have to be all things to all people at all times. Resist the Wonder Woman syndrome and enjoy the help.
Get Step-by-Step Help With Developing Your Offer!
3. Scale your existing markets and deliverables.
Here’s how that progression works:
- One to one—you have a primary offering that you need to deliver personally to every client in order to build your brand.
- One to many—offer versions of your deliverables that let you reach many people at once, reducing your resource expenditure. Think group classes.
- Zero to many—create deliverables that require none of your time once they’re created. E-courses and workbooks are two great examples.
So, which diversification strategy is right for you? Ideally, all of them. Need help getting started? Book a Laser Session for a quick 90-Minute Zoom Session to develop an action plan!
