Having one revenue stream may prove a business is unreliable, insufficient, and risky. While it’s pretty tough to create one successful income stream, the benefits of developing and making more are worth the try.
Multiple and diversified revenue streams are considered the elixir of any business. A company with more revenue streams will be more risk-averse to market volatility, more financially stable, and more infinitely marketable.
Here are five ways to develop and make revenue streams.
Develop New Products And Services
One of the best ways to make a new revenue stream is to make more new products and services when possible. But to be clear, it isn’t an optional extra but a necessity for business growth and profitability.
While there’s a lot at stake in doing so, there are several ways to minimize risks, allocate resources, and invest wisely. For example, the new product and services should:
- Meet customers’ specifications, including their usability, design, and performance benefits;
- Should be technologically feasible, meeting the design, resource, and manufacturing requirements;
- Meet the business strategies and play to the business’s strengths.
Have a strong product development strategy. It supports a business’s ability to make an idea into a profitable product and then modify it to stay competitive within the market. Consider how different techniques will work for every step and then adjust based on previous experiences to get the most out of product development strategies.
Build Strategic Partnerships
In addition to developing new products or services, developing a new approach to connecting them to customers is another way to create new revenue streams. One good example is strategic partnerships.
For example, partner with complimentary service providers or like-minded brands to open up referrals. It’s important to note that creating value for a partner first and then making a pitch is a must. Having a mutual delivery of value makes the partnership worthwhile.
Strategic partnerships are imperative for every company since they can be powerful levers to drive tremendous business growth. In today’s market, indulging in partnership ecosystems is the only way to survive. However, organizations shouldn’t jump into partnership exploration. Instead, they should establish a decision-making framework.
A decision-making framework can help business owners assess a new approach or capability. It can help determine whether a new approach or capability should be better built internally, accessed through a vendor or acquisition relationship, or partnered to deliver the value required. This can create a great customer experience, access partners’ respective audiences, and leverage a unique value proposition to drive new customer acquisition.
Recognize and Seize Potential Opportunities
Businesses of any size must diversify their product offerings. Otherwise, they’ll be putting all their eggs in one basket. The COVID-pandemic has taught them that change is here and it’s constant. It’s either they stay the same and risk obsolescence or take control and find new opportunities.
The first step to opportunity-seizing is setting a course and following it. It doesn’t have to be written in stone but rather flexible. It should be able to accommodate rising changes and give leaders an idea of what types of opportunities to pass on and take advantage of.
With a plan in place, organizations should be primed and prepared to seize opportunities. Stay abreast of customers’ expectations and proactively steer the business in that direction. Look both within and outside of your market as well. This helps in identifying lines of business that can enhance existing offerings.
It’s also crucial to educate employees on the changing nature of business and the involved role risk. Don’t always think that risk is a dangerous word. Deliberately approaching risks can actually offer a strategic organizational advantage. Nonetheless, ensure to approach every decision strategically.
Follow Market Trends
Revenue streams can also be taken from new consumer trends. Following trends within the fast-moving marketplace doesn’t only give companies innovative and up-to-date business ideas but also helps them forecast better and easier.
Additionally, since they can see and predict the future if they follow the trends, companies can quickly identify early warnings and build a reliable system of changes. This inbuilt tight risk control can cut their losses early. Plus, there’ll be lower transactional costs since trend following is a slow-paced type of trading.
More importantly, following market trends can meet consumer demand. Based on the new consumer trends, businesses can develop new products and services and adjust their marketing efforts and product line, ensuring profitability.
Sublet Resources
Aside from getting creative with new revenue streams, many companies sublet their office spaces to keep themselves in business going during their slowdowns. With so many SMEs taking a hit due to COVID and the recent economic crisis, they can repurpose resources to earn revenue still and stay open.
Taking out loans can also help businesses to maintain a constant cash flow during tough times. Companies need significant operating cash to not only run business activities effectively but also improve profitability.
Don’t worry about credit rating. Several financial institutions offer business financing, regardless of credit rating. Take creditninja.com online loans, for example. Use the funds to replenish cash flow or working capital while subletting resources.
Final Thoughts
In business, revenue streams have the same importance as the revenues themselves. They generally influence business planning, strategy, and investment. And overall, having multiple diversified revenue streams is a valid way of making a business more profitable.
