When you step out on faith to run your own business, one your first questions might be “How will I make money?” This is an important, because its answer could set you up for success or failure.
Revenue is the lifeblood of your business. Knowing how money makes its way into your bank account is a critical step in building a profitable and sustainable business. And having multiple streams of revenue (e.g. more than one way people buy from you) can help you prepare for inevitable economic shifts.
For instance, if you’re a contractor, it’s important to understand which portion of your revenue comes from commercial or residential construction. Maybe both? Or if customers will buy more kitchen and bath projects or whole home renovations.
The answers to these questions can help you determine how to market your business, where to invest in equipment and so much more. And being able to address more than one customer need is the key to financial stability for your business.
Here is an example from our own revenue planning:
Growmetix® creates and delivers training programs designed to help growing businesses scale. We sell these services to organizations who want their suppliers to be ready to scale.
If this were our only way of making money, we’d be stuck in the long cycle of submitting and hoping to win work through proposals or cultivating relationships with supply chain leaders. If you have ever negotiated a deal with a large corporation (or the government), you know it takes time to develop a portfolio of corporate or government contracts.
Growmetix® couples our program development and facilitation work with one on one and group coaching programs offered directly to growing business owners of color, like you! It takes less than 30-minutes for you to say, “Yes, I’m in!” for coaching.
Having a broad product mix with multiple ways we can bring in money helps to balance our revenue potential.
Thinking about your own revenue sources:
- Do you have the right mix of revenue coming in from lower priced products that customers purchase easily and quickly vs. higher priced ones that customers give more or longer consideration?
- Do you know what’s popular in your industry right now? Are chicken sandwiches selling more than turkey or beef burgers?
- What other ways can you think of that your customers buy from you?
