Creative Ways to Diversify Your Revenue Stream
As an agency leader, thinking creatively about new ways to diversify your revenue streams beyond your core services is vital. Through diversifying revenue streams, your agency can reduce its dependence on any single source of revenue and better weather economic downturns. This not only provides financial stability for your agency but also makes your business more attractive to potential buyers in the future.
Exploring new revenue streams for your business
When exploring new revenue streams, it’s important to research potential opportunities that align with your business model and goals. This could include identifying untapped markets (which could be upstream or downstream from your current clients), exploring complementary products or services, and/or leveraging existing customer relationships. Although the opportunities are vast, it is important to approach new revenue streams with caution and to consider potential challenges that may arise.
Despite the potential challenges, exploring new revenue streams is a necessary step in building a sustainable and resilient business. By taking the time to research and identify potential opportunities and develop a plan for addressing potential challenges, businesses can successfully diversify their revenue streams and drive growth further than originally planned.
5 Creative ways to diversify revenue streams
Once you’ve identified potential new revenue streams and have assessed the potential challenges, it’s time to explore specific tactics for diversifying your income sources in creative and effective ways.
Here are five different ways agencies can diversify their revenue streams:
1. Offer strategic guidance
Many agencies have expertise in a particular category or with a specific audience and can leverage that knowledge by offering strategic services. This could include workshops, webinars, coaching, or training services that help clients improve their operations, increase efficiency, or achieve their goals.
By offering these types of services, businesses can generate a new stream of recurring revenue and establish themselves as experts in their field.
2. Develop digital products
Agencies can leverage their expertise and create and sell digital products such as e-books, courses, or software. These products can be a great way to generate recurring revenue, as they can be sold to a large audience without the need for physical inventory or shipping costs.
Additionally, digital products can be created once and then sold repeatedly, making them a scalable source of revenue and passive income for years to come.
3. Partner with a tech provider
Partnering with a technology provider can help businesses diversify their revenue streams by expanding their offering to include a new product or service. This could include offering a new software tool, platform, or app that complements existing products or services.
By partnering with a tech provider, agencies can leverage their ecosystem to gain more visibility with potential clients. Tech providers often do a great job of aggregating communities of folks with similar needs.
4. Subscription-based services
Subscription-based services are a great way to generate recurring revenue while providing value to customers. This could include offering a membership program or a subscription-based service that provides ongoing access to products or services.
Similar to developing digital products, subscription-based services, if implemented effectively, can increase passive revenue streams.
5. Referral programs
An agency referral program is a marketing tactic that encourages you and your colleagues to share new business opportunities. The program is built around the idea that you will provide a financial incentive when someone refers new business. Similarly, you will receive a financial incentive when you refer new business to your colleagues.
Experience has shown that it is best to create a referral system with folks who offer related but not similar services, are not in competition with you, and who have a positive brand image. A recommendation from a trusted brand will improve your brand perception and perceived authority. As an example, say you sell design services and you often have clients who need SEO services. In this scenario, you can develop a referral partnership with trusted SEO agencies. When your clients need SEO help, you can refer them to your partners. And when your partners’ clients need design work, they’ll be sent your way in return.
Key Takeaway
My advice is to go on the offense and take action by exploring new revenue streams that align with your business model and goals. By diversifying revenue streams, you can position your agency for long-term growth and success without the burden of uncertainty and lack of preparedness.
Good luck!