What if Amazon still only sells books? What if Starbucks still only sells coffee? What if McDonald’s only sells burgers? Will it be Amazon, Starbucks and McDonald’s? Have you ever heard of them? Maybe, but probably not.
So why are you still selling the same few products or services?
What Amazon and Starbucks and countless other great businesses – both large and small – have learned is that one of the keys to continued success and growth is creating new revenue streams, multiple profit centers.
You see, I understand that being self-employed can be time consuming. Even after things have finally become a reality, there is still work to be done. In particular, one of these ongoing challenges is figuring out how to create a regular, steady stream of revenue. Some days it feels effortless, while others do not.
If you’ve been in business for a while, you’ve come up with some solid strategies that work for you and your business. You know that this sale or this product is profitable. You have created what I call a recipe for success. Like a chef or a baker, your recipes can be used over and over again to create the same financial result. Here’s how you make your dough (play on words). Your recipes can be anything: Twitter ads, monthly sales, e-newsletter promotion and so on.
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However, the deal with the recipe method is that it can have the opposite effect.
Many small businesses make the mistake of inventing a good recipe, sticking to it, and never inventing Plan B after milking Plan A dry. Having only one formula for making money is a problem because the business cycle is inherently volatile; just because you have something that works now doesn’t mean it will work in six months. Taste changes, things stagnate, and so on.
Therefore, to ensure a steady stream of income, you need to be like Amazon and Starbucks and create several strategies for making money – or “multiple profit centers”, as Barbara Winter calls them in her great book Living Without Life work “
Let’s look at the Starbucks example. The Seattle giant is creating many profit centers, usually through the introduction of new products and seasonal marketing. In the summer, Starbucks tends to sell its damn cold drinks (the Chocolate Cream Cold Brews they sell this summer are especially bad!), While in the fall and winter, a number of new hot lattes are usually introduced.
It’s like being an investor. You need to diversify your portfolio.
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And what about Amazon? Amazon started as a home business that only sells books, but eventually Jeff Bezos realized that the company would make a lot more money if it offered a more diverse range of products. He created many profit centers. Now they sell everything.
Amazon and Starbucks are two of the most successful businesses around. Both prioritize the need for strong, solid multiple profit centers, and both businesses did so early in the game. Because they did this early enough, they were able to ensure a steady, consistent flow of money from the start and made the right impression on customers. The sooner you manage to diversify your business, the better.
There are endless ways to add multiple profit centers to your business, whether you are a lawyer, artist, performer or restaurant owner. Take a look at what the competition is doing, be creative with your own ideas and soon you can have a steady latte with a full coffee.
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