It’s another Expert Briefs, where I ask really smart business owners to answer your burning questions.
If you've missed past Expert Briefs, you can click on the undies to see them all –>
There appears to be a fine line between FOCUS and Diversification at times. On the one hand, you want to focus your business and your business assets for greatest return on investment. On the other hand, you want to have some diversification.
(Translation: Don't put all of your eggs in one basket.)
So, I was wondering how you've diversified your business or your income. Do you have multiple income streams? If so, how'd you choose them, and what are they? Thanks!
I think you'll find the answers this week interesting and hopefully motivating.
Rachel Rofe of RachelRofe.com says:
This is a GREAT question.
I would say that it makes sense to focus on one project at a time until it's systemized and as “hands off” as possible.
For example, when I launch a new site, there's a week or two period when I get extremely excited about laying out all of my ideas.
I get people on board, I have outsourcers ready to get things going, and then I have a system where I don't need to do much for its long term success.
Once that's done, I feel free to move on to the next thing.
I strongly believe that “if you chase two rabbits, both will escape”… so I only work on ONE of these projects at a time.
Some of my multiple income streams are different types of sites – I have sites where I teach people about internet marketing, smaller niche sites, membership sites, affiliate sites, help offline businesses with their internet marketing, do consulting, speaking, and more. And I've recently started dabbling in real estate.
Basically I do whatever excites me and seems to have a good profit potential… and it's worked pretty well for me!
Kristen Eckstein of Finish Writing Your Book Fast: Book Writing for Procrastinators says:
I've found that I needed to focus on one niche to maximize ROI. However, it's still important to diversify within that niche. For instance, instead of having a site about “How to potty train your cat” and “How to market your book” and “How to make money with underwater basket weaving” (diversity in many niches), I've chosen to focus on one niche and diversify within that as follows:
- Imagine! Studios, LLC – Parent company providing graphic design and book coaching services, mostly for items relating to books and book marketing materials.
- Imagine! Books – my indie publishing company that sells my own books.
- “Finish the Book!” – writing coaching programs designed to help people get their books written in record time.
- “I am Published!” – Indie publishing consulting programs set up as done-for-you solutions that keep the author in 100% control over the production, distribution and repurposing rights.
- “Market My Book!” – DIY course that teaches how to develop a 4-month book marketing plan in less than one hour, with optional done-for-you packages to upgrade to.
Each of these programs has a freebie opt-in with autoresponders directing people to more valuable how-to info as well as info on the paid programs. By diversifying within my niche, I've created 4 streams of income for services and digital products, as well as a separate stream of income for each book I publish. Right now I have 10 streams of income as a direct result of diversifying within my niche.
It wasn't always this way. When asked, “What do you do?” I used to answer, “Everything on the back of my business card.” That was everything from graphic design to photography to art licensing and illustration to book coaching… I was wearing myself ragged trying to keep up, and I was an expert at being an expert in nothing. By focusing on books, which includes writing, publishing and marketing, I have set myself up as an expert in books and as a direct result my business has grown over 500% in the past two years, when I was struggling with shoot-in-the-dark tactics before.
Some niches only have a little diversifying ability, so I would encourage anyone to choose one niche, diversify as much within that niche as possible, then once you feel you can branch out into another niche and your current one is working on auto-pilot, do so. As for me, I think I'll stick within the niche of books. There's plenty there for me to keep diversifying in!
Felicia Slattery of Signature Speech Secrets says:
I diversify my business by keeping everything I do related but different enough so I can always count on at least one part of my work to bring me income on a regular basis (that mortgage has to be paid & the kids gotta eat!!).
First I'm a professional speaker and I make money either on the front end by my clients, in this case meeting planners, paying me to be there OR by selling my products and services from the stage (that's 2 different forms of professional speaking, by the way — so there's diversification even in that!).
Next, I work with private clients in my consulting business. I limit my regular private clients to 5 at any given time so I can really focus on their individual needs and provide excellent service.
For a while I had removed just about everything I had for sale online because I was in the process of rebranding myself a bit. Now that process is complete, I'm systematically rolling through my 5 years' worth of content, refreshing and releasing my work for sale using basic Internet marketing strategies. (Love those sales that come in while I sleep, play with the kids at the pool, or go on date night with my hubby!).
Of course I make money promoting affiliate products and services, but in a very minimal way. I could take a few lessons from you on that!
Finally, my last stream of income is from sponsors. I learned how to do that from one of our colleagues and mutual friend, Shannon Cherry, and it's been another excellent source of big ticket revenue for me.
Everything I do relates to my area of expertise: communication and public speaking. Keeping that SKILL focus allows me to diversify where my income comes from so I never have to count on just one form of income and worry that it might dry up. It's been an effective way to run my business and know I'll always have money rolling in.
Nicole Dean of .. here! .. says:
The reason why I asked this question is that I was preparing my presentation for the NAMS Conference in Atlanta and the topic was “Building Assets: Multiple Streams of Income without Madness”.
Why is this a Problem?
The problem is that, we suffer from Entrepreneurial ADD. (Admit it.) 🙂
I think a bigger problem though – the root of the problem – is lack of confidence in 3 things:
1. That this whole internet marketing thing really works.
2. That your idea is good enough.
3. That YOU are good enough.
You put those three things together and it becomes VERY tempting to jump ship to a new niche or market or “easy button” on a monthly basis.
The problem is that, as you're jumping from project to project and idea to idea, you aren't getting any momentum.
The other problem with diversification is that you're splitting your time between less profitable projects and more profitable projects (an average) – rather than throwing your everything into the highest profit projects you have.
So, does that mean that focus is the answer?
Well, there is a reason why race horses wear blinders, right? To get to the finish line without distraction.
However, there is also an advantage to having a little diversification, too.
1. What IF … you put all your eggs in one basket and something happened. You'd lose your entire income.
2. It's fun to play. I find that, having some variety gives me the opportunity to play and avoid boredom.
It truly is a balancing act.
What Have I Done?
Over the years, after spreading myself too thin on a bunch of niche sites (and driving myself totally insane), I've focused in on my core strengths and have put the blinders on to other distractions.
My core mission is:
To Help Busy Online Marketers, specifically InfoProduct Sellers (and future InfoProduct Sellers), to Build Sustainable Online Businesses that Help them Reach their Financial and Lifestyle Goals while Making both the Web and the World a Better Place. And, Hopefully Having a Lot of Fun While Doing It.
Yes, I still have a handful of niche sites. Those are my playgrounds where I can test things out to see if they work in the “real world”. Most of those are totally outsourced now and are just “free money” for me.
Throw your comments and questions at me about this, please. I'd love to hear your thoughts.
PS. Recommended! If you need someone to tell you “THIS project” is the one to focus on or “THIS traffic technique is what you need to be doing” – I recommend my friend (and mastermind partner who I brainstorm with on a daily basis), Susanne Myers, who offers private coaching for much cheaper than I do.
You can check it out here: Private Confidential Business Coaching with Susanne Myers.
I HIGHLY recommend it.