Successful business owners know that a diverse revenue stream is key to long-term profitability. When you branch out beyond your original products and services, you can improve your company’s stability and mitigate risks, too. All of these benefits are certainly a compelling case for revenue diversification, but you might wonder where to start. Check out the following seven sources of revenue that your business can invest in today.
1. Licensing Agreements
Licensing agreements are a great source of extra revenue for businesses. This is especially true if your business is in an industry such as tech, where proprietary products can be quite lucrative. In order to jump start this revenue stream, you can work with an attorney to develop the contract you’ll use in these agreements. Generally, a licensing agreement allows clients to use your proprietary product in exchange for a fee. If you can establish a steady stream of licensing relationships, you can generate substantial revenue for your company.
2. Leasing Equipment
In addition to licensing proprietary products, you can generate additional income for your business by leasing equipment that you don’t currently use. If you have a few computers that primarily serve as backups, for example, you may be able to turn them into cash by renting them to another business. Before doing so, you should consider the following:
- The possibility that you will need the equipment again
- Whether the equipment is fully functional
- Who would be interested in renting the equipment
If there’s a viable market for your company’s equipment — and it’s newer and in good condition — this could be a great source of extra funds for your business.
3. Marketing via Messaging
Messaging is the default digital communication method for billions of people around the world. In addition to the convenience and comfort that it offers, messaging can open the door to expressive conversations filled with GIFs and emojis. If your company offers A2P customer service, rich communication services are a potential source of untapped income in the form of social marketing. RCS allows businesses to create more engaging interactions with customers and market more effectively in doing so. This, in turn, can become its own revenue stream for your business.
4. Referral Incentives
Expanding your customer base is a reliable way to boost revenue. It’s often easier said than done, though, without a coordinated effort to reach new audiences. Offering referral incentives is one way to gain customers and enhance your company’s revenue streams. Referral incentives typically involve offering rewards to customers who recommend your business to their friends and family. This is also known as word-of-mouth marketing, and it’s one of the most effective ways for companies to increase their revenue without investing in explicit marketing campaigns.
5. Advertising Fees
Building up a following on social media is a fantastic strategy for your company’s long-term success and relevance. It can also be a source of revenue if you opt to leverage it for profit. You can do this by offering promotional opportunities to other brands and businesses in exchange for an advertising fee. This fee will generally be calculated based on the type of promotion you offer, how many followers your company has, and your general level of engagement.
6. Subscription Model
If your business sells goods or services that are compatible with a subscription model, this can be another valuable source of revenue to take advantage of. As customers pay into this system, they receive ongoing access to your company’s product. If you set the monthly subscription price relatively low — for example, $15 or less — most customers will forget about the fee. If you are able to amass a decent number of subscribers, though, that revenue can add up quickly.
7. Consulting Services
Finally, if you want to branch out into a new field and generate additional revenue, offering consulting services is a great opportunity. This source of revenue can be particularly lucrative in fields such as the following:
- Software management
- Business and entrepreneurship
- Security and cybersecurity
- Financial services
- Management and leadership
You can attract clients to your company’s consultancy services by advertising your own expertise in your field and leveraging your business’s success to gain credibility.
Generating new revenue streams for your business is simple when you try any of these seven steps. Diversify your business’s income and increase your profitability in the process.
