What if Amazon still only sold books? What if Starbucks still only sold coffee? What if McDonald’s only sold hamburgers? Would they be Amazon and Starbucks and McDonald’s? Would you have ever of even heard of them? Maybe, but probably not.
So why are you still only selling the same few products or services?
What Amazon and Starbucks and countless other great businesses – big and small alike – learned is that one key to continued success and growth is creating new streams of revenue, multiple profit centers.
Look, I get it, being self-employed can be laborious. Even after things are finally off the ground and have become a reality, there is always more work to be done. In particular, one of those ongoing challenges is figuring out how to create a regular, steady stream of income. Some days this feels effortless, while others, not.
If you’ve been in it for a while, then you already have already figured out a few solid strategies that work for you and your business. You know that this sale or that product is a winner. You have created what I call a recipe for success. Like a chef or a baker, your recipes can be used time and time again to create the same financial result. This is how you make your dough (pun intended). Your recipes could be anything: Twitter ads, monthly sales, an e-newsletter promotion and so on.
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However, the deal with the recipe method is that it can backfire.
A lot of small businesses make the mistake of figuring out one good recipe, sticking to it and never figuring out a Plan B once they’ve milked Plan A dry. Having only one moneymaking formula is a problem in that the cycle of business is inherently fluctuating; just because you have something that works now doesn’t mean it will still work six months from now. Tastes changes, things get stale, etc.
That is why, in order to guarantee a steady income stream, you need to be like Amazon and Starbucks and create several moneymaking strategies – or “multiple profit centers” as Barbara Winter refers to them in her great book “Making a Living Without a Job.”
Let’s drill down into the Starbucks example. The Seattle behemoth creates many multiple profit centers, typically by introducing new products and seasonal marketing. In the summertime, Starbucks tends to market the heck out of its cold beverages (the Chocolate Cream Cold Brew they are selling this summer are especially evil!), whereas in the fall and winter, an array of new hot lattes usually get introduced.
It’s like being an investor. You need to diversify your portfolio.
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And what about Amazon? Amazon started out as a home-based business that only sold books, but eventually, Jeff Bezos realized that the company would make a whole lot more money if they offered a more diverse array of products. He created multiple profit centers. Now they sell everything.
Amazon and Starbucks are two of the most successful businesses around. Both prioritize the need for strong, solid multiple profit centers and both businesses did this early on in the game. Because they did this early enough, they were able to ensure a solid, consistent flow of cash from the get-go and made the right impression on customers. The earlier you can diversify your business, the better.
There are endless ways to add multiple profit centers to your business, whether you’re a lawyer, an artist, a contractor or a restaurant owner. Look at what the competition is doing, get creative with your own ideas and before long, you, too, can be sipping a full-caf consistent revenue latté.
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