While it’s important not to spread oneself thin and try to work on too many projects at once, it’s also important to develop multiple streams of income. One has to find a proper balance between the two. Generating multiple streams of income is not just a wealth-generation strategy, it is also a matter of increased financial security.
Consider these very real online examples of what can occur when one has too many eggs in one basket:
- You are earning a majority of your income from Amazon, when suddenly new tax laws incite Amazon to ban all affiliates from a certain state, which just happens to be your state.
- You earn a majority of your income from one website, which receives a majority of its traffic from Google search results. The website does not receive a high enough percentage of its traffic from other sources, such as referring websites, affiliates, or loyal repeat visitors. One day, Google makes a major algorithm shift, and, right or wrong, your website drops in its rankings, causing it to loose 75% of its traffic and income.
- You are a freelancer and earn a majority of your income from one client. One day, your client suddenly decides to go out of business and cancels your contract with no prior notice.
- You earn a majority of your income from an Adwords campaign you are running. Suddenly, Google changes the rules, discontinues your campaign, or raises your cost per click to the point where your campaign is no longer profitable. Goodbye to that stream of income.
- You earn a majority of your income from Adsense revenue, and one day, whether for correct reasons or not, your Adsense account gets canceled.
- A large portion of your income comes from a site that sells small but unnecessary luxury items. A recession hits, people clamp down on frivolous expenses, and your sales plummet.
These are examples, and I imagine you could think of more. This is not to scare you, but to help prepare you – to help you remember that an internet marketer or an entrepreneur who puts too many eggs in one basket is putting himself at a certain degree of risk.
If you remain aware of that, as you build your business, you can proof yourself against future catastrophe in the event that the unforeseeable should occur.
Each of the above examples is real – I have either seen it happen to others, or it has happened to me. But in no case did it occur that I lost one stream of income, when it was my only stream of income.
When you work independently, online or otherwise, you have (or can have) increased freedom of movement, you can potentially live and work from wherever you like to live and work, you have no ceiling on your income (though you have to work for it, it is far more expandable than a fixed wage and an occasional raise), and if you do well, you will eventually find that you have many more opportunities available to you than you would if you worked at a 9-5 job.
However, you also have less security than a 9-5 job would give you. Yes, you can be fired from a 9-5 job, but usually with some notice. Not so, in the examples given above – you may or may not have any warning, and what warning you do have may be minimal. I won’t go into details on the ins and outs of unemployment insurance and whatnot, because I think you get the gist.
When you build an online business, remember that you are building a business. Remember that you are an entrepreneur, and that a greater responsibility lies on your shoulders for your income and your future financial security. Build a business model which allows you to receive multiple streams of income.
- If you are a freelance web developer, remember that having long-term clients is good, but having several long term clients is better.
- If you are a webmaster and you earn revenue from your websites, have more than one website earning money for you, and don’t rely too heavily on any one source of traffic.
- Make your websites good enough that people will remember them and come back to them, regardless of your search engine rankings.
- If you sell products through affiliates, aim to have many affiliates.
- Look for recession-proof products or services you can sell or promote. Products and services that cater to businesses are always a good idea. Businesses will continue to need and buy services as long as they are in business, providing that that product/service helps them make more money.
- If you earn revenue through affiliate marketing or advertising, don’t just advertise one product or rely on one ad network for all of your revenue. Test several, so that you can always readjust if something goes wrong with one of them.
- If you rely on Pay Per Click advertising, have more than one campaign running and successful. And maybe not just with Google, or Yahoo, or whatever it is you are using.
- If you have multiple streams of income, you won’t have disaster if one drops out or decreases. In fact, you might barely notice.
Also, remember, it’s not just about security. Multiple streams of income = multiple steams of income potential, and allows far more room for expansion. Just remember to keep things in balance, and make sure you have the time, resources, and/or outsourcing staff you need, in order to keep every project going at an optimum rate.
I hope this is helpful. Feel free to leave feedback on any similar scenarios you have witnessed or can think of; and any suggestions you might have, on how to proof up your business model for greater security – as well as greater potential.