Dr Scott King shares his knowledge on a range of subjects as we navigate doing business in 2021
It’s one word which as business owners and leaders we will always have in our thoughts.
Not because we are 24/7 focused on profits and making money, but because without revenue businesses can’t operate.
Revenue is like the fuel in the car that ensures it keeps running!
It is important that businesses have a range of revenue streams.
Imagine, you have all your eggs in one basket and then one day, for whatever reason, there are no more eggs arriving.
What do you do? How can your business continue to operate? To counter this, you need to ensure you have eggs coming into your basket from different sources.
This means if one stops, the basket can still continue to fill, and your business can continue.
It is important that a business utilises the right mix of revenue streams.
Having a good range of revenue streams will reduce the risk associated with relying on one source of income for your business i.e., having all your eggs in one basket.
Through the proper establishment of multiple (and profitable) revenue streams you can fuel the sustainable growth of your business!
Whilst many businesses will have identified the benefit of having multiple revenue streams some will have shied away from this for reasons that may include:
They don’t know how to develop, cost, resource and market a new stream.
They are lacking confidence in their own capabilities.
They’ve tried to set up a new stream before and it didn’t go to plan.
They don’t have the physical infrastructure inhouse to manufacture new goods/products.
What’s The Right Mix of Streams?
That’s really your decision! You know your business better than anyone, however you may also be too close to your business to see the opportunities to diversify and generate new revenue streams, or you may not have the capabilities in house to plan, develop and establish the new stream.
I strongly recommend you consider having a discussion with knowledgeable people on your board (if you have one) or external to your organisation.
It is also important to ensure your revenue streams align with your business strategy.
If you haven’t reviewed your strategy recently, then you should spend some time doing this. The outcomes of this review will impact your revenue stream choices. So, before you shoot from the hip and decide to start a new stream, take a minute to pause and think.
Deciding to establish a new revenue stream is an important decision.
You need to ensure that you properly plan and resource (people, equipment, time, processes, marketing, and ultimately money!) to give it the greatest chance of being successful.
Timing is also important. Perhaps the time isn’t quite right for either the business or the market, but that doesn’t mean you can’t start planning your new offering so that when the time is right you can hit the green light.
You also need to remember to manage your own expectations. Setting up a new stream doesn’t mean it will be profitable on day 1.
Additionally, as the stream picks up pace you should continue to evolve, adapt and resource it so as to ensure it remains attractive to your customers whilst also remaining profitable for you.
Dr Scott King is co-founder of Pinnacle Growth Group, a business advisory firm based in Lisburn.
Scott is experienced in advising public and private sector organisations of various scales and spanning numerous sectors.
If you would like to talk about how you can use goals to drive your business forward, email Scott at: [email protected]
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