Revenue streams for your business – how many ways can you make £50,000?
If you sell services such as coaching, consulting, design or therapy, at some point you will look at your revenue streams and realise that you have opportunities to think beyond that hourly rate you may charge right now. If you are already working on developing different revenue streams in your business, then I hope my article today will help simplify the process that may be overwhelming you.
There’s lots of conflicting advice – some great, some darn right awful – about revenue streams. What you “should be” doing and the magic formulas and systems to follow to create that proverbial laptop lifestyle that you may be alluring towards.
Today, I want to bring the whole topic of revenue streams back to basics and ask you. “How many ways can you make £50,000 in your business in the next year?”
It’s not a trick question nor am I about to launch into some scammy way of turning on a money tap whilst lounging back on a Caribbean sundeck. It’s a serious question that all experts and service based professionals need to answer at some point in their business.
It doesn’t have to be £50,000 … it could be that all you are after is an extra £1,000 each month and just as likely that your aim is higher and focused on £100,000 and beyond.
The specific numbers don’t matter here because every one of you reading this will have your own personal goals and ambitions. So for the sake of simplicity and needing an example to work through, I’m going to stick to £50,000 as an easy number to demonstrate the options available to you.
First of all, why is knowing your available revenue streams important?
Being aware of your revenue stream options and knowing how you are going to make £50,000 is going to significantly impact your marketing strategy, positioning required, resources needed, skills to learn and how much time and effort you are required to get it all working.
Your business model – how you shape your revenue streams and how you physically engage with your clients – is directly related to how successful you become.
And because most people who set up a service based business – be it coaching, therapy, design or professional services such as accounting or financial advice – don’t realise that there is more than one way to make a £50,000, you often get trapped into following industry standard examples or taking opinion based advice from the latest guru to hit the scene, rather than pragmatic, logical business practicality.
Let me give you a couple of examples.
Revenue Stream Example Number One: Freeium and low price
Someone I spoke to recently had recently spent a significant amount of her investment cash setting up a new membership website. There was no questioning her passion for helping the audience she wanted to reach out; she knew they were desperate for clear signposting and easy to access advice.
But 14 months in and her beautifully designed website was verging on a marketing disaster. Although visits to the site were climbing and she was good traction in the forums, database building was almost non-existent.
Her plan was to start with the freeium model and then start charging £10 a month. If this person wanted to make £50,000 that would mean 417 customers, assuming that all 417 would stay a minimum of 12 months (which is, quite frankly, pie in the sky).
Of course, long term these kind of sites can work but you have to be prepared with big buckets of resources (AKA cashflow, time, energy and much determination) because your marketing strategy has to be focused on high volume as you offering low prices.
It’s highly unlikely that any decent profit will be made for at least a year or two (probably many more!) if you are relying solely on this kind of revenue model.
Revenue Stream Example Number Two: Premium and high price
Let’s go the other end of the scale.
A client I worked with last year came from many years in the publishing industry. Now I am sure you are aware of the massive changes that have turned much of the publishing sector on it’s head. The problem she was still stuck in the traditional, old school business model where very little revenue was created until a book was published and selling.
For her to make £50,000, it was all about book contracts; working hard upfront and only seeing rewards when (and sometimes if!) the book was successful.
When we starting diving in to the process she went through with her author clients, it was apparent to me, almost immediately, the value of what she did even before the content was written.
Of course, being surrounded with the traditional – and very much outdated – publishing business model, it was a classic case of “what you don’t know, you don’t know.”
After just one conversation with me, it was as if a search light was beaming through the fog and a new path became clear. Offering her services as a book coach and mentor at the start of the process was an obvious place to begin; charging for the 3 month run up to getting the book ready for editing was not only profitable for my client but incredibly powerful and instrumental for the success of her author clients.
Easier to sell lower priced products and programmes?
The price you decide to charge has a lot to do with your success.
As an expert who may offer coaching, consulting, design or professional services, it’s often perceived easier to start at the lower end of charge scale.
I’m sure you seen the classic product funnel that shows you to start with a £10 introductory product, which leads in to a £295 course and then takes your customers in to your more premium programmes or service bundles of £1,000 and more.
So what many of you do is start creating your £10 introductory offer because you believe you need to build your list. And a £10 product is so much easier and safer to create, is it not?
Coming back to the question on hand – how do you go about creating £50,000 … that’s a hell of a lot of £10 sales you need to make to build enough momentum to move people up to your next mid-level product.
You’d probably be needing 500+ sales to get you to that £50,000.
Phew! That’s exhausting (and I speak from experience!) This kind of product funnel works. There’s no doubt about it. But starting with the perceived easier end of the funnel is not always your easiest path to profits.
A far quicker, simpler and easier way is to flip your funnel on it’s head and start at the top end of the scale. Even if you decided to start small and create a programme or service at around the £2,000 mark, it becomes obvious that you have to sell to far fewer people to get yourself to your £50,000 goal.
In just 5 sales, you’ll be one fifth of the way there.
Now of course, I’m starting to sound like the rainbow unicorn who comes by once a week to poop clients on your desk if you ask to nicely enough.
You know clients aren’t going to magically appear with intention alone (don’t you?!). There is focus needed for your overall strategy and positioning, a clear offer created and an understanding of what your market place really wants.
But I hope that you get the point that I am making here.
Think carefully about your pricing and offers as you grow your business. Just because you may feel the lower priced end of revenue streams are easier to get going, they won’t always be the holy grail to your business success.
But if you get the right mix of prices and numbers of clients right that works for you, the way you like to do business and the type of marketing you’ll enjoy the most, creating £50,000 is a lot easier in your business than you probably believe right now.
I’d love to know your thoughts and comments on creating the right revenue streams in your business. Leave a comment below and tell what you do right now. What works, what hasn’t. And if you have a question, feel free to get in touch; email me or ping me a message on Facebook or Twitter. I’d love to hear from you.