I just had an interesting email exchange with biznik business writer Joseph Riden. He sent a quote I’d like to share and build on.
“Don’t waste your time pursuing multiple streams of revenue if you don’t already have a good primary source of revenue. Too many people want to do it all, but they do it all poorly or marginally well.” –Wally Adamchik
The quintessential entrepreneur can and does wear many hats. Entrepreneurs are masters at mulit-tasking and are generally mutli-talented. It is for this reason that it is easy to see why an entrepreneur might light up at the idea of multiple streams of income.
“Multiple streams of income” simply means that you have a variety of ways to make money, not just one. Where the problems start are when we diversify what we do rather than diversify how we do what we do. What, exactly, is the difference?
Some proponents of multiple streams of income offer all kinds of systems. For example: the 5 streams of income where you invest in real estate, the stock market and a few others. These proponents suggest you pick the one you are most good at to start with then branch out to the others. This is an example of diversifying what you do. Take many things that aren’t related and do them all.
When you diversify how you do what you do you are looking at a different ballgame. First of all you must have strong legs around what you do. Most entrepreneurs, upwards of 80%, are service professionals. That is they provide a service rather than sell a product. Think FedEx, chiropractors and lawyers. So to create multiple streams of income you must have a certain level of expertise at what you do. Take one thing and make many things from it. (For clarity, let’s say you are a chiropractor. I am suggesting you specialize in one aspect of chiropractic like adjusting the atlas or working with children. This is growing strong legs. Otherwise you do it all within the field of chiropractic: adjusting the atlas and working with kids and auto accident victims in other words, everybody. This would be taking many things that aren’t related and doing them all. A common mistake is that we think staying in the same field equals focusing. BIG misnomer)
Now before you jump into creating multiple streams of income, understand that it requires a significant investment in not only time but energy and often of money. (though there are plenty of no or low-cost ways to diversify your income streams) Here are a few foundational elements you should have in place.
First of all: Do you LOVE what you do? Does your work energize you? Are you working with ideal clients - ones that charge rather than drain you? If not, do not proceed with multiple streams of income. Your work at this point is to find what you love about your work, pull it to the forefront and find ideal clients who will gladly pay you for it. If you skip this step you will chain yourself to even more energy drains and become a slave to your work rather than being freed by it.
If you do love your work and your work energizes you then step two is: Do you have good systems already in place to support more clients and contacts? Because when you have multiple streams of income you naturally have more people coming to you. Good systems are things like a solid referral system, a networking contact and follow-up system, a client response system and basic office management systems. If not, develop these and stick with them until they are relatively smooth and effective.
If you have good systems in place then check point three is: do you have an idea of how you can diversify? Writing? Speaking? Seminars? Blogging? Google’s AdSense? Group consulting? Corporate contracts? Product development? There are so many possible revenue streams. You need to find the ones that work with your natural skills and proclivities and begin with the one that is easiest and that you are most likely to do.
And step four is: a plan. Do not just dive in. Do the back-end work to create a plan so you can really be successful. Multiple streams of income are appealing because they greatly expand our income potential. But if you don’t have a good plan, based on having done homework, understanding revenue diversification, a clear sense of why you are doing it and where you are headed you will make it more work than it’s worth.
As entrepreneurs, sometimes our enthusiasm gets the best of us and we dive into multiple streams of income without a strong enough foundation in our expertise and the systems to support more business. Take the steps necessary to be ready for this wonderful opportunity. And when you are ready, craft a solid and inspiring plan and be on your way. Be sure to share what you’ve learned with others who want to break into multiple streams of income so they can learn from your mistakes and triumphs, helping to ensure ease and victory on their path to multiple streams of income.
Much success to you!