Look at you smart cookie, adding more streams of revenue to your online business! (Good call friend!)
Maybe you have a specific new service/product idea you’re reallyyy excited about right now. Or maybe, like me, you’ve got 10 different ideas and are trying to wade your way through the options, not sure which you should actually dedicate to creating.
Regardless of which applies to you, we’ve got to put that new income stream idea to the test.
Not all revenue streams are built equally. Some require a heck of a lot more time and investment than others to get going. Some might be more rewarding or genuinely helpful to your audience than others.
So, no matter what your potential new income stream idea is, we’ve got to run it through these questions first to see if it passes!
Yep, question 1 actually has nothing to do with your new idea. It instead has everything to do with your current business. Do you wake up daily and attack your tasks with the grace of a chicken with its head cut off? Are you missing deadlines and struggling to keep up with the work you already have?
If that’s a yes, it’s a tell tale sign to hold up on the new income stream, and first sort your current income stream(s) out.
That could mean changing up the way you offer your product/services to be easier and more streamlined. That could mean putting processes in place and using systems to automate as much as can be automated. That means writing guides and documents that help your clients or team members to run what’s already happening more efficiently.
Basically, don’t add more to your plate until you’ve fully mastered what’s on it.
If you’ve implemented every process, system and automation method available to you, this might even mean hiring on help.
If you do get your current income stream to pass the test on this question, feel free to move right along to the next!
You’re going to have to decide between offering a service or product.
For services, they require your time and energy mostly. Launching services is quick and easy to do. You basically create your concept, plan out your process, packages and pricing and pop a page for your website advertising it.
Products take a lot more time to create, but once they’re up and selling, they’re a very life-giving option. (As in, they give you your life back.) In order to sell a product though, you must have an email list.
You can expect 1-2% of your email list to convert into a sale of your product, so take a moment to do a little math on how big your list needs to be in order to sell your preferred number of products.
If you have no’s to both of those questions, all is not lost! Again, work on making your current income streams as simple for you to run as possible in order to offer a service, or build up that email list in order to launch a product.
The biggest mistake I see people making (I would say especially when it comes to products, for services I wouldn’t sweat this one so much) is to spend foreverrr making them, pouring their heart and soul into creating the most wonderful thing anyone has ever seen and then launching it only to see tumbleweeds blow through their payment processor system.
The issue here? The person pulled the classic build a product before an audience move.
It’s best to build your audience first and then start talking with them to see what they need and then build your product.
Without a doubt, your best ideas won’t even come from you. They’ll come from your audience.
Now your audience probably won’t say “Hey I want exactly X,Y & Z” but they will ask you questions. And it’s your job as a business owner to figure out how to critically analyze those questions to determine what product/service you could create which would best serve them.
For example, students of my course on building fabulous Squarespace sites asked again and again and again ALL of the questions about working with clients.
No one said “Hey, I want a course on being a web designer” but I generally got the idea that if they’re asking all these relating to being a web designer and running a business, that’s something they need help with. And my Square Secrets Business course was born!
One last thing to ask yourself is, have people asked specifically for the new income stream you’re debating? I’ve noticed a big uptick in the number of people asking me to be their business coach lately. Keep an eye on those trends.
If you have a few ideas and one will take a few months, and another will day 2 days, that’s an important thing to take note of. Of course, when going into any unknown territory, it can be hard to estimate a time frame exactly, but it’s pretty obvious that writing an e-book will take less time than launching a conference.
Just because something takes a long time doesn’t mean you shouldn’t do it, but it’s something to weigh when making your decision.
Seeing that we’re talking about income streams, it’s important to take income potential into consideration.
If you’re selling a service, figure out the cost of the service and the number of clients you could realistically take on in a given time frame (eg. a year). If you’re selling a product, figure out the cost of the product and the number of people you could expect to sell to (eg. 1-2% of your email list) in a year.
Once you’ve got an estimation on income, you can make a better informed decision.
I always had it in my heart that I wanted to run an in-person event, a weekend website building workshop. But when I estimated both time and money, I realized that an event was high on the ‘amount of time needed’ scale and very low on the ‘profit’ scale. So the idea was scrapped.
Remember at the beginning when we talked about you needing time to actually create the new income stream, and if you’re too busy with what you’re already doing, it’s not going to go well?
You can consciously take this into consideration when deciding on your new income stream? If you build this, will it earn income while you work on other stuff in the future? Or will it always tie you up and therefore stop you from following new passions and creating new income streams in the future?
Services tend to score not so well on this one, whereas products are prime for killing it in this area.
Basically from this question you want to determine, do you need to get educated first or buy expensive equipment or hire someone first?
All these are not ideal. Not deal breakers, but if you have a few ideas which don’t involve spending months studying or buying a really pricey camera or hiring team members, it might be best to get your toes dipped into the water with the easier ideas first.
This one could legit make all the others almost irrelevant, or significantly minimize the impact of them.
Remember that in-person event I mentioned? The one which was likely to just break even financially and would take up a lot of time? I still just kinda want to do it deep down. Pretty much just because I really do enjoy getting to meet customers face to face and interact with them.
Your enthusiasm and passion really will affect any project, positively or negatively, so it’s something to take into serious consideration.
Maybe just balance out your more wild income stream ideas that you’re super passionate about with others which are fabulous income generators and life-givers.