ESYB2 046 - Your Revenue Streams
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[00:00:00] Now, let's discuss the business planning for your revenue stream or revenue streams, and it's very difficult to do in a general video like this because you might have a restaurant, you might have a cleaning business, you might have a mobile app, you might have some kind of a new type of a Uber app, and this is not a situation where one size fits all, so I'll go over the basics and you consider What fits your situation?

So there's this general debate, should you diversify and have many revenue streams or just one? And a lot of people, they will say you should have many revenue streams. Don't put your eggs in one basket, yada, yada, yada. We all have heard that story, but often what actually happens is there's one or a small number of very strong revenue streams that are far stronger than many of the other potential ones.

So you might have 10 potential revenue streams, but really 8 or 9 of them, they're mediocre and [00:01:00] one might be like really outperforming the rest of them. So in this case, It's very often a mistake to try to split your efforts into 10 mediocre strategies and really what you should be doing is maximizing that big one.

Most businesses, you'll notice they structure everything around maximizing their most effective revenue streams and make those reach their potential. So let me go over the common revenue streams you might consider and let's go over the effectiveness of them and when, when you might consider opting out.

Applying them most people when they start out they ask should I just put ads on my website or my product or whatever? First of all, your customers don't like seeing ads. It turns them off. It ruins the consumer experience It's sometimes necessary, but nobody's anywhere for the ads, right? Ads are a nuisance and they're usually the most common thing people think about but they're also one of the worst monetizing typically Not always, I mean different industries, different [00:02:00] types of ads have different rates, but you'll make about 5 per 1000 page views on the web.

So you see, you have to have a huge, huge, huge amount of traffic to make a reasonable amount of money here, especially to build a business on it. It's only a fit for websites that are highly, highly trafficked daily, like news sites, or entertainment sites, or viral sites, but most businesses are just not going to make a lot of money with ads.

The next option most people consider is affiliate or referral businesses. The great thing about these is that you can have that revenue going quickly because you don't need to build your product. You can just resell other people's products or other companies products and collect commissions. The main challenge with this is that you're actually building up somebody else's business when you're promoting it.

So it's not ideal because you really want to be selling your own product. And often when you sell your own products, often you keep a larger part of the sale rather than just collecting a affiliate commission. But to be fair, some affiliate commissions can be quite large. [00:03:00] But for most businesses, what happens is they sell their own products and services.

And most of the time, new entrepreneurs focus on finding new clients. They sell once and they're happy and it is great. But what you really want to do is sell multiple products or services to your customers. So what you want to do is if you have multiple products like a catalog, let's say you go to a store and you buy yogurt, you'll notice there's like strawberry flavor, blueberry flavor, cherry flavor.

That's because People can try one of each and then all of a sudden they just bought three or four times more than they plans to. The same thing is with consumables, that same yogurt. If the person buys it and they like it, they'll come back and buy it. They'll come back and buy it. And if they make it a daily habit to eat your yogurt, they'll buy it 365 times more that year.

Multiple purchases is what you want. Sometimes this comes in a consumable fashion where they just need. to renew, like razor blades for shaving. There's a lot of products that can be consumed and then people [00:04:00] need to buy them again. But sometimes, if it's not consumable, what you can do is make things a subscription.

Like magazines have subscriptions, some websites have subscriptions monthly so that you can accrue that revenue so you don't start from zero every month. And as long as people subscribe, they often stay subscribed, which is great for your business. The challenge with subscriptions is a lot of people don't want to sign up for subscriptions because they know they're not going to unsubscribe, they're going to forget.

So there's this other option of being subscription like, which doesn't involve getting people to actually sign up for a subscription contract, but it's at the same time somehow getting them to come back and again and again and again. Which is close to the consumables model. And now let me give you a few tips to boost your existing revenue streams.

Of course, you always want to ask for tips or extra donations on top of the current thing you're selling. If it's applicable, if it's not applicable, okay, just don't do that. But sometimes asking for tips just [00:05:00] increases your revenue a little bit. For doing nothing much more also what you want to do is make sure that customer happiness is a high, high, high priority for you because if they are happy, they'll come back naturally.

You don't have to pull them back. There's no tricks. Same thing with customer support. It's a way to make your customers happier. And sometimes that's actually a way to suggest. Additional products to your customers. Also, if people are naturally happy with your business, they'll naturally bring their friends, but you also want to incentivize people to bring their friends.

You want to give some kind of discounts for invites or some sort of incentives for people to bring friends or make things more fun when they bring their friends like events or something like that. So, depending on what your business is, some of these may or may not be applicable and just giving you a broad range of things to apply to your situation.

And of course, you can offer add ons. For example, if you buy a car, you know, they give you, you want power windows? Okay, you pay more. You want an extra cool feature? You pay a little more. [00:06:00] And so, instead of getting the basic option, people get the little higher end option, and then all of a sudden, they just paid more, you just made more money.

The same thing with my services. When I offer services, like for example, SEO services, I also offered you one link building. Okay. Yes. Do you want content creation? Yes. And so I may have sold for a small amount in the beginning, but then I upsold a few add on services. So immediately now that person is spending more money and if that person is happy, then they're going to retain me.

Long term for that SEO service and what's going to happen is a subscription like situation where every month I'm doing some work for that client So instead of selling for a small amount up front these strategies help you sell for a larger amount and long term So this is a broad overview of your monetization strategies and what you can expect from each So try to apply it for your business and see which ones fit the [00:07:00] best

