As a business owner, you’ve most likely heard that having multiple streams of income is vital to growing and scaling your business. While having money coming in from many different places sounds ideal, knowing how to get started can be daunting. In this article, we will explain what it means to have multiple streams of income, how passive income can help you scale your business, and give a few examples of multiple streams of income in action.
What Are Multiple Streams of Income?
So what does it mean to have multiple streams of income? Simply put, having multiple streams of income means that you are generating revenue from more than one product or service. This can be as simple as having a 9-5 job and selling products in an Etsy store on the side, or can be very complicated, with many streams of income within one business.
According to The Hartford, there is a myth that says that the average millionaire has seven different streams of income. While having multiple income streams is certainly a good way to amass wealth, The Hartford points out that this myth is a misconception that leads people to believe that wealthy business owners have their fingers in many pies. In reality, having seven or more income streams is usually the result of perfecting one type of passive income stream and then making small variations.
What is Passive Income?
Passive income is a type of income that continues to produce revenue without active labor. For example, if you create and sell a digital product or course online, you can continue to make money off of your products long after you have finished work on them, since you get paid every time a customer purchases and downloads them. Other examples of passive income include trademark licensing fees, patent royalties, and residual checks for actors. The beauty of passive income is that it doesn’t require the time or attention of you or your team, so you don’t have to do any “extra” work once you have your passive income stream set up.
Examples of Multiple Income Streams
Having multiple streams of revenue looks different for each business owner. To get an idea of what income pathways might be best for you, take inspiration for the following examples:
• Starting a “side hustle,” such as driving for Lyft or selling handmade products online
• Owning and renting properties to create rental income
• Having a social media presence that allows you to be paid by advertisers or through affiliate marketing
• Selling a digital product (such as an e-book) or course
• If you are a photographer, selling your photos to stock photo websites
• Partnering with a company to wrap an advertisement on your car
Starting a second, third, or fourth income stream can be as simple or complex as you’d like it to be. Overall, having multiple streams of income will help you grow and scale your business, raise your revenue, and provide a safety net if one part of your business suddenly becomes less profitable. After all, the more lines you have in the water, the more fish you will catch.