Why Having Multiple Revenue Streams Will Take Your Business from Good to Great

You know that you should diversify your investments.  You wouldn’t want to invest 100% of your money in one stock.  You’d want to diversify to an index or simply across multiple stocks in several industry sectors to protect your money and minimize the inevitable ups and downs of the stock market.  But what about diversifying your business revenue?  Have you thought about safeguarding your business by adding multiple revenue streams?

No.  That’s ok.  I didn’t consciously think about it until about eight months ago.  But in order to run a successful fitness studio (or business), you need to have multiple revenue streams.  Here’s why…

You will protect your biggest asset

My business is my biggest asset.  I’m guessing your business is your biggest asset as well.  And while I don’t sit around constantly contemplating the sale of my studios, it’s important to remember that they are an asset of value and a great deal of that value comes from the predictable revenues or memberships that have been sold.  I am always working to make sure that our reoccurring memberships which we call Pure Barre Platinum (12-month contract) and Open Barre (month-to-month no contract) equal my fixed costs and salaries.  The more reoccurring revenue or membership revenue that your business can count on, the more stable the business is—the more valuable it becomes.  Working to grow reoccurring revenue also has the added benefit of reducing your stress because you’ll know how much money your business is expected to earn each month and there won’t be any worries about how you’ll pay your rent or your employees.

 You can increase wallet share

I discussed this in last week’s post about the value of your distribution channel, but if you can find a product or service to sell one client, you can probably find something else to sell to them in the future—you can increase wallet share for your business.  What else could you sell to your existing client base?  For my business, it’s workout apparel and accessories.  If a client has a membership, selling them workout clothing is a great second revenue stream.  It makes sense—clients would need workout clothes to take class.  What else could you sell your clients to gain wallet share?

 A cash infusion can fuel growth

Developing an additional revenue stream could mean a cash infusion for your business that can fuel growth or allow you to reinvest in the business.  What does this mean?  For my studios, we sell student semester packages three times a year.  Since the students pay for several months in advance, that’s three times a year we receive a significant cash infusion to save for tax payments, purchase additional equipment, make studio improvements or simply add to the studio savings account.

Diversifying your business revenue will take your business from good to great and ensure your biggest asset remains your biggest asset.  But how do you develop multiple revenue streams and increase leads?  That’s what I’ll delve into in my next post—how to increase leads and ensure you have a steady stream of leads to grow your business.

Until then, stay on your toes!

Why Your Distribution Channel Is the Most Important Part of Your Business

If I asked you what the most important part of your business is, what would you say?  Would you say, your Team?  Great answer!  And yes, your Team is an important part of your business, but maybe not THE most important part.  What about your product or service?  That’s pretty important, after all—it’s why you’re in business—to sell your product or service.  But, when you get down to it, it’s your distribution channel—or your list of clients and customers that is THE most important part of your business.

Have I lost you?  Do you disagree?

I’ve said this many times throughout the posts in this blog—I think my team is amazing.  They work hard and constantly challenge themselves, which I appreciate.  However, if one of them moved away and stopped working for me, I would hire someone else and train them.  Eventually that person would be integrated into the team and working hard alongside everyone else.

But, without your list of clients or customers to purchase your products or services, you wouldn’t have anything—just your physical storefront or website and no sales, no revenue, no business. 

The most important thing you can do for your business is to keep growing your client or customer base by getting more leads or prospects who might want to buy from you.  Are you worried about having too many clients or too many leads?  No such thing!  When your business is built on a solid foundation (like we discussed here), you can always hire more employees to help you or open another location to serve this growing client base.

So I’m sorry, what’s this whole thing about a distribution channel?

Think about it.  If you have spent time and effort to build trust with your client base, why would they just buy one product or service from you?  Why could you not try and sell them on multiple transactions?  For instance, in my studios, we sell packages of Pure Barre classes.  Once we get a client committed to taking class and loving it, we’ve earned their trust and they become more open to other things—like workout clothing, which we also sell.

So now we have 2 revenue streams that we can count on from just 1 client, classes and clothing.  What if there was something else we could sell them?  Juice, food, accessories, a new type of Pure Barre class—it really wouldn’t matter what the new product or service would be, because we’ve built that trust, we’ve created a client interested in what we’re selling now as well as what we will sell in the future.

How much better off would your business be if you had multiple revenue streams?  How can you use your existing client list to grow your business by increasing the number of products or services offered to them to purchase?  And finally, how can you grow your leads to grow your business?

That is what I’d like to discuss next week—how to create multiple revenue streams for your business as well as how to increase your leads.  You won’t learn this in business school.  No MBA required.

Until then, stay on your toes!