You NEED to diversify your income streams. Like, now. Let’s talk about how, why, and all things income streams!
Diversify your income streams… NOW!
Want to listen to the podcast version of this post? I’ve got you covered!
I’ve talked about diversifying your income before.
Because it’s just that important! There’s another episode called “The 7 Streams of Income You Need” that you can check out right here for more information about the different income streams available to you.
In our current pandemic-ridden world, it’s become a LOT more evident why you need multiple, diverse streams of income. We’re right at one year of being on lockdown, and one year of many businesses being shut down or changed.
That makes me so sad. There are businesses that haven’t been able to open in this year or who haven’t made anywhere near the amount of money they usually would. Restaurants, for example, have got to still be hurting.
Summer is our tourist season where I live, and with restaurants opening at limited capacity, there was a three-hour wait to get into any restaurant on a Friday night this summer. Product-based businesses here make most of their money from tourism, and they’ve likely had the hardest year they’ve had. And some of them weren’t making a ton of money to begin with, so this hits them much harder.
If it’s happening here, I know it’s happening elsewhere.
If any year has ever shown you that you need to diversify your income, 2020 was it.
Before this past year, it was easy to avoid diversifying your income streams. But now, SO many businesses have seen how quickly their livelihoods can be taken away. Diversifying your income stream is crucial!
I sometimes get stuck in my own bubble here, because COVID didn’t affect my income that much. If anything, my income went up because more people looked online for new business solutions. But many of my plans TOTALLY changed because of the pandemic. I wanted to start offering local classes and host a retreat where I coached women. And those things were totally derailed. Plus, I’m a mom – and we all know how virtual school has been going (*shudder*). I had time to do things in February that I had NO time to do in March.
We’ve ALL been affected by this pandemic. Responsibilities beyond business have taken up a lot of our dedicated time. ESPECIALLY if you’re a mom whose kids have been home from school. I’ve had my business the entire time I’ve had my kids, but it takes a LOT of effort to be a stay-at-home business owner and a teacher, too.
I had to get scrappy real quick! I hired my first full-time employee because I needed the help and I taught my kids how to make some different foods by themselves. You do what you have to do!
Diversifying your income protects your livelihood.
If you own a restaurant and haven’t been able to open at full-capacity for one year, your income probably looks drastically different. By diversifying your income streams, when one arm of your business gets cut off, you have others!
I’m not saying that all of your income streams need to be equal. But I am saying that adding multiple income streams will help you protect your livelihood if something happens and one of them gets cut off.
If a restaurant owner also had a course teaching other restaurant owners how to manage their finances, then they have another source of income to fall back on if their restaurant is forced to shut down. It’s SO difficult to react to those changes in the moment, and having other income streams in place BEFORE an arm gets cut off makes the transition much smoother.
It doesn’t have to be something as different as a course, either. If you’re a restaurant owner who also has curbside pick-up options, then that’s a creative solution for this problem. A lot of restaurants locally had to implement curbside pickup after the fact, when it was much more stressful and people didn’t know how it worked. If they had that in place before, it wouldn’t have been such a scramble.
I saw some local restaurants take it a step further and box up frozen meals for people to purchase and make at home. That’s a GREAT option to diversify their income.
If you have different income streams in place, it doesn’t hurt as much when one arm is cut off.
Online businesses should diversify their income streams, too.
This isn’t just for brick-and-mortar stores!
Imagine that most of my income comes in from YouTube (it doesn’t, but we’re imagining). So, I rely most heavily on the ad revenue I make from YouTube videos. Now, let’s say that someone reports my channel because they didn’t like something I said, it goes against something in the terms and conditions, and I get shut down.
This has happened to different people – their entire livelihoods were stripped away because someone didn’t like something they said.
Recently, there was an Etsy shop that got totally shut down because it was reported for violating terms and conditions. The shop sold different stuff in support of law enforcement officers. When I looked at it, I didn’t see anything offensive – but because it was reported and Etsy didn’t want backlash, the shop was taken down.
Her livelihood was shut down because Etsy closed her store. I always say “don’t build your house on someone else’s land,” and this is a prime example as to why. Perception is enough to get you “canceled” these days. There’s nothing wrong with saying you’re the proud wife of a police officer! That would be like me being canceled because I said I was proud to be a preacher’s wife – which isn’t above the realm of possibility, here.
If my YouTube channel is my main stream of income and someone cancels me because I’m a preacher’s wife… then I’m screwed. Someone just took both my entire income stream AND the way I communicate with my audience away from me.
That can happen with your YouTube, your Facebook, your Instagram, your Twitter – anything.
The fact that a platform can be taken away from you at any time is enough to warrant diversifying your income streams!
You can make your entire living speaking on stages, and you were screwed in 2020. Or, you could make your entire living doing one-on-one consulting work where you drive and meet with clients. You could be affected by an illness that stops you from doing that consulting for a while, or a chronic illness that keeps you from it forever.
I say that, and I need you to really take in what I need to tell you.
I do NOT mean you need a different business.
You do NOT need 42 different businesses. IF you are at a place where you can physically run multiple businesses and want to, then this might be a different tory. But when I talk about diversifying your income streams, I am NOT talking about running a bunch of different businesses. I mean diversifying the actual ways in which you make money within one business.
Example. In Business A, maybe they make money with a physical product and with affiliates. That’s two income streams. If they add in courses and a service, they have 4 income streams. They have 3 other income streams to fall back on if one of those gets cut.
If you sell a physical product and you also make money from affiliates and courses, you have 3 streams of income. During 2020, one of your physical suppliers couldn’t get you the product because #2020. It’s going to hurt, but you still have your courses and affiliates that you can double down on.
Don’t wait for an emergency, a pandemic, or the loss of your income to diversify your income streams. DO IT NOW.
I’ve been saying this for 10,000 years: there is DANGER when you build your house on someone else’s land. Private companies can shut down whoever they want to shut down.
If you’re making all of your money from sponsorships as an Instagram influencer. All of a sudden, they find out you voted for Biden and decide to pull all of your sponsorships. It’s happening on both sides of the political aisle. You could lose EVERY BIT of sponsorships that you have. And if that’s your only income, that’s a problem.
If you have multiple streams of income and lose all of your sponsorships, then you can double down on other streams while you build that one back up. It takes so much stress and uncertainty out of the equation.
We live in a climate where platforms can easily be taken away. When I first started talking about this back in 2011, I talked about how WordPress is the best place to host your website because YOU own the content. Other web providers have the opportunity to shut you down. Any privately owned platform can take down your content if someone doesn’t agree with it.
I NEED you to understand that it is entirely possible in this climate to lose an arm of your income. And I NEED you to diversify your income streams now.
Sit down and think about how you can diversify your income streams. Brainstorm different ideas and act on them.