How to Create Additional Revenue Streams Whilst Launching Your Start-Up
I wrote this article following a round-table we did at WeWorkLabs at Merchant Square, London. It is a subject I frequently cover when working with start-ups, growing and established companies, many of whom are looking to find additional revenues within their business. This can be to cover an income gap, a downturn, or to unlock under-valued capability.
Whatever your needs, it follows a simple methodology that anyone can apply. And once you have grasped it, you will be surprised at how many opportunities you’ll find. The basic premise is that there are five key ways of earning money:
Service: This involves selling your time. You can only sell time through multiples of the people you employ. Many of the creative industries work this way, but so do gardeners, app developers and barbers.
Product: A product can be an item, software or an event, but involves you creating something before you can sell it. Cabbages, shoes, a festival – you have to produce it before you can generate income from it.
Knowledge: Many people and organizations sell knowledge – consultancies, colleges. It can be a valuable commodity when packaged up in the right way.
Intel/Data: This involves selling behavioral patterns, what you have learned from customer purchasing patterns, usage, dwell-time – all are behaviors that have value.
Customers/Clients: This is the value that sits in your audience, end-user, whether access or eyeballs, attendees, with different values for different markets.
Most companies only earn revenues in just one or two ways. However it is perfectly possible for you to earn a revenue in several, if not all, of them. But first you need to understand what you have, what intellectual assets you own that could be repurposed, by unpacking your current offer.
- Draw up five equal columns on a large piece of paper or white-board.
- At the top of the left-hand column write which ever of the above five categories you currently have as your main core business. If it is a Service, put that as the left-hand column heading.
- Then add the other headings to the other columns in any order you want.
- Under that left-hand column title, list out the different aspects of your core offer by unpicking it in detail. The more granular, the better.
A PR company would have ‘Service’ in the left-hand column, whereas an app company would have Product in the left-hand column.
By unpicking all aspects of its Product, the app company would list user interface, the build, the content, images etc. all within the left-hand column.
- Now focusing on just one of the items in the left-hand column, move across the other columns, unpicking what Knowledge you need/utilize to provide that one item, what service its creation or provision might involve, what intel/data you have built from it or whether it has brought you more clients, and who they are.
The aim is to unpack more assets from your core business than you realized you owned. Keep pushing it, looking in depth at every single point.
By being rigorous in this exercise for each item in your left-hand column, you should have a variety of elements across the four other columns.
For example, a student studying fashion will be able to list illustration, design, pattern cutting, how to use a sewing machine, fabrics, trends, etc. under their Knowledge column.
The next step is to look at every single line in each other column one by one. Ask yourself who else might value this nugget of knowledge, or would find this service useful? Where could this piece of behavioral intel find a new market? Can you develop the customer/client base to find new revenues, perhaps through events or workshops?
By doing this exercise thoroughly, you will gain a whole new approach to identifying what there is of value within your business. It can be startling to see just how much you actually ‘own’. But the realization is not enough by itself – you have to come up with ways to turn these assets into new revenues streams.
So really be inventive about what new revenues you could find within your own assets. It isn’t difficult and could provide you with a much needed cash injection, allow you to attract additional audiences, or provide you with off-shoots that you can grow separately.