Creating Multiple Revenue Streams
by Gwen Moran
When Jo Smith Schloeder began her business, Wall Township, NJ-based Creative Approach, Inc., any given day might find her creating and licensing illustrations, designing ornaments, providing marketing and public relations consulting to small businesses or designing Web sites. If it seems like an odd mix of endeavors, welcome to the new entrepreneurial era, where multiple revenue streams are all the rage.
"When you work for someone else, you're of the mindset that you look for new jobs," says Schloeder. "When you're entrepreneurial and self-employed, you train your mind to look for opportunities. Where is the need that I can fill and do it well and make it profitable for me?"
In fact, says Barbara J. Winter, author of "Making a Living Without a Job," this mindset is part of an evolution of entrepreneurial thinking. "The whole idea of multiple profit centers is a reflection of the fact that people who have any level of self-awareness realize they have multiple talents," she explains. "After self-employment, the next step is to think about options like 'My gosh, I could manage property and write a book and go on and do other things.'"
According to Winter, who runs a multiple revenue stream business which includes consulting, writing, publishing and creating seminars, one of the primary benefits of cultivating this type of business is cash flow. In the cyclical nature of business, she explains, the cash flow of one revenue segment may hold steady while another dips or rises. This provides a continuity that is not present in a business that has one source of income.
Schloeder agrees. "If you look at most Americans that are very financially successful, one thing you will find in common is that they don't put all of their eggs in one basket," she says. "In the beginning, diversification of revenue streams gives you a lot more work and details, but in the long run, it also offers greater peace of mind and greater security."
Another benefit of creating such a multifaceted business, according to Winter, is that it is good for the creative spirit of the business owner. Mary Windishar, owner of Windishar Communications in Alameda, CA, agrees. Listed on her current resume: Windishar is the host of Inside China, a television show that is broadcast on nearly 30 PBS stations around the country; host of The Parent Club, a radio show for parents; a voice-over artist; an actress working in television commercials and industrial films, among other projects; an instructor of voice narration; a consultant to a television news station in Seattle (Windishar used to be a producer for Oprah); a marketing and media consultant to medical clients and a writer of public relations and advertising materials.
"I think that I do so many things because I have so many different experiences and I want to be able to put them all to work," she explains. "By doing all of these different things and having kids, I have the flexibility to also act in [a program] that teaches children about art - and I don't have to ask my boss."
Although multiple revenue stream generation is easiest among the self-employed, there are possibilities for those in the ranks of corporate America, as well. Erica James* launched a party-supply store with her sister while working full-time for a pharmaceutical company. Erica's sister runs the day-to-day operations of the store, while Erica herself finds new suppliers in her travels with her "day" job and oversees some of the management and marketing functions of the business. Erica asked that her name be changed for this article, however, as her employer does not know about her additional venture. Some companies have policies about second jobs or ventures, especially in similar fields, so be sure to check your employment agreement or employee manual before you plot your course.
The multiple revenue stream business model has gained more credibility with the advent of e-commerce. Most successful Web sites generate their revenue from more than one product or service. However, some clients still believe that a business should focus on one or two areas of specialization. Businesses with too diverse a dossier may be seen as flighty or unfocused. In fact, Windishar and Schloeder both stressed the importance of target marketing in order to avoid confusion in the marketplace.
Windishar makes it a strong policy to focus on discussing only one or two services with each client, having found that most clients cannot understand her diverse skill set. Schloeder has, more recently, moved away from marketing her art. "Not to say that I would never do another licensing agreement," she explains. "But when your income streams are that diverse, it becomes difficult to switch hats." Instead, she focuses on diversifying the marketing and public relations services she offers. In fact, each continues to try new revenue opportunities as they arise.
Winter finds the attitude of some clients ironic. "We have accepted a convoluted definition of personal responsibility," she says. "Following your own calling is the most responsible thing you can do. Staying in a career situation that is less than that of which you're capable is the irresponsible choice."
* Not her real name.
Gwen Moran is the founder of BoostYourBiz.com, an online marketing resource
for small to mid-sized businesses that launches in July. She also owns a marketing agency and
writes frequently about marketing and business issues. E-mail her at