If you rely solely on one revenue stream, you’ll find yourself up the proverbial creek without a paddle should it lose its profitability. Here are some tips for establishing alternative sources of revenue without cutting off your core focus.
Product-based businesses arguably have it easier than services-based ones when it comes to diversifying their offering – they can just add different products. Yet not all have it so easy, while many services businesses essentially operate as one-trick ponies.
Consultant Clare Long of Norgay HR Consulting knows this only too well. When business is slow or her schedule is full of high-value clients who she doesn’t want to pass to less experienced consultants, it becomes apparent that there is a clear limit to how much revenue she can raise.
Clare turned to technology as a means of adding additional income into her business that wasn’t labour-intensive to achieve.
“It's not a huge cut; to me I look at that as the edge,” she explains on the My Business Podcast.
“I work with a very, very good product that takes the guesswork out of hiring. One client in particular that comes to mind, they were very deliberate and very strategic on the type of environment that they wanted to build culturally, and therefore everybody that comes into their business needs to meet a certain fit from a cultural perspective.”
As well as bringing in additional revenue, this psychometric testing tool, which focuses on personality traits, allows Clare to add additional value to her clients by avoiding incompatible hires. As such, she can focus her higher-cost service – her time as a consultant – on more complex tasks.
Another tool she offers assists clients to manage more of their HR matters in-house, delivering revenue from clients that would not necessarily engage her services at all, or would do so less frequently.
“We provide a very cost-effective cloud-based technology solution, set them up to be self-sufficient on that and they can manage that themselves. It's a very flexible delivery model,” says Clare.
“They can either manage the day-to-day HR admin stuff themselves, call us in for the more strategic and tricky stuff. It's flexible, it's meeting the needs and, practically speaking, their budget as well.”
Boosting your revenue sources by offering value-adds to clients is not a new strategy, but it is one that is easily overlooked by busy business owners focused on their core activities.
Another SME owner, Becky Dyer of BB Pilates + Physio, took a similar approach by creating instructional videos of her physio-based pilates classes, to make them accessible to a much larger audience and also enhance the experience of existing clients.