“Don’t put all your eggs in one basket” — no doubt you’ve heard this adage many times before, especially as it applies to the investment world. A diversified portfolio of stocks, bonds and cash is often touted as the best way to protect your assets by minimizing downside risk. What is true of investment, however, is just as true in business.

A business especially a small business may focus on delivering a single product or service. You may not have the overhead that larger businesses sustain; you can therefore dedicate yourself to selling your offerings at a reasonable price, while aiming like a laser at your target market. However, nothing is certain, and economic cycles will come and go. It is wise, therefore, to focus on developing multiple streams of income for your business as a hedge against any possible market downturns.

One practical application of this idea is in selling what are commonly known as “bread and butter” items on the side, while you keep selling your main products. For example, consider the case of a store that sells, and services, personal computers. The computers represent their main product line. However, the store also sells “accessories”.

These accessories come in the form of cables of every variety, printer cartridges, CDs, and so forth. While these are certainly small ticket items, it is fact that they have some of the largest profit margins. Therefore the store wisely stocks up on a wide assortment of accessories—their bread and butter items—while continuing to sell and service personal computers.

The smaller products may not be protection against as catastrophic a risk as complete business failure, but they help bring in extra streams of income to bring in a consistent cash flow during times that the main revenue streams fluctuate.

Look for a way to spin-off your main income-generating business into multiple revenue streams. Perhaps, in addition to providing your main service, you can also derive extra income by imparting what you know to others. You may be able to conduct—and charge for—seminars in your line of work, or work part-time at a community college, vocational school or business college.

Think of the big, wide world of information products as well. You could write an ebook selling important information related to your line of work, and sell it from your company’s web site. While you’re on the web, consider the lucrative side profits that can be generated by affiliate programs. Find companies with products that complement your own, and become their affiliates. Some affiliate programs provide high commission rates that can earn you a tidy income on the side.

The key is to think in terms of what kinds of new, but related, income-generating products can be derived from your core business. A catering service, for example, can put together a series of cookbooks, and sell those to its customers as well. The same business might even engage in a concentrated Internet marketing campaign, selling its services from its website and even contributing to various ezines, sharing their expertise with consumers on the world wide web.

It’s important, however, that you do not treat your web site or Internet marketing campaigns as nothing more than glorified advertisements. In order to sell on the web, you will need to provide quality, usable information, time and again, that people will come to rely upon. This method of ‘soft selling’ will qualify your prospects, and make them all the more eager to buy into your products or services.

Are you a service professional, such as a computer programmer, writer, or graphic designer, for example? One popular way these days to market your services is by joining the increasingly popular ‘reverse auction’ outsourcing web sites, such as Elance.com. These sites function as talent auctions, drawing buyers and providers from around the world who post, and bid upon, various projects.

The advantage that the outsourcing sites provide for service providers is that they are usually low-cost venues in which they may market their services. Sometimes only a small monthly fee is charged; apart from this, no money is spent on advertising. You may wind up networking with important business contacts in these sites who can take your business to a whole new level.

However, you will have to know what your minimum hourly rate is, and how efficient you can be in delivering the end product to your buyer. A fixed-bid approach does not allow for much flexibility, should the project scope change during the course of the work. Therefore, you will need to be clear about requirements, communicate often, and know how to work quickly while maintaining a decent standard of quality.

None of these ideas may evolve into anything more than supplemental income. But imagine if you have multiple ideas going at once. Each of these income streams becomes like the multiple tributaries of a river; little by little, you will be bringing in extra wealth, and who knows where one or more of those tributaries may ultimately extend.

David
Small Business Resource