Why You Need 5 Income Streams

No matter where you are on your professional or entrepreneurial journey, you need financial diversification as far as income. It's safe to say that having multiple streams of income is necessary for success in life and business.

It's important to distinguish between income streams and revenue streams. Typically revenue streams refer to incoming cash flow for companies whereas income streams refer to incoming cash flow for individuals. There are many schools of thought about how many revenue streams are needed for business owners and individuals to achieve success. Of course, success is subjective. However, for the sake of argument let's say that success equates to financial freedom, which means having the money to live as you please.

If you're an entrepreneur, you probably have at least a few income streams for yourself and a few revenue streams for your business. However, I heard that you need at least 5 to 7 revenue streams to be successful. Considering the percentage of start-up businesses that fail, (according to the Bureau of Labor Statistics) in the first five years of business, I would agree that having multiple revenue and income streams is a smart idea.

There are probably many revenue streams that would allow you to have a profitable business and comfortable lifestyle. However, listed below are the five main revenue stream classifications that I believe are necessary for success.

#1 – A revenue stream that pays your monthly living expenses. (Add the total amount of all your financial responsibilities.)

#2 – A revenue stream that invests in wealth building. (Add all of the items that you would like to invest in.)

#3 – A revenue stream that pays for personal or career development and growth. (Add all of the costs for the programs, masterminds, classes, or continuing ed you need.)

#4 – A revenue stream to invest in fun life experiences. (Add up all of the costs from your bucket list.)

#5 – A revenue stream to contribute towards retirement expenses. (How much will it take for you to comfortably retire?)

BONUS #6 - A revenue stream for charity - A pot of money that you can use to give back to your community and help others.

NOW that you KNOW the CLASSIFICATIONS of the 5 necessary revenue streams you need, let's dig deeper.?

Here are 5 TYPES of the TOP Revenue Streams to consider:

1.?Selling Assets?– Asset sale?is the most commonly used revenue stream in business today. Selling assets simply means you sell a product or a service and someone buys it.

2.??Subscription Fees?– This revenue stream is based on providing your target audience ongoing access to your products or services on a monthly, quarterly, or yearly basis. Subscription-based revenue streams are great for the business owner because the cost to produce them is so low.?

3.?Advertising Fees?– This revenue stream makes you money because you take in fees for advertising a company, brand, product, or service on your online or offline property such as your website or inside your physical building.

4.?Sponsorship?– Sponsorship is based on selling rights, privileges, or assets to a third party. The money provided in a sponsorship deal is given by one company to support a person, organization, activity, event, or entity. The sponsorship is often in exchange for a partnership that includes advertising, brand exposure,?or other mutually agreed upon assets.

5.?Leasing or Renting?– Using leasing or renting as a revenue stream involves allowing someone exclusive access to your assets for a limited amount of time.

The main thing to remember is that you must choose the best revenue stream that is going to work for your needs.

To learn more about how I work with entrepreneurs to help them increase sales and cash flow so they can grow their businesses, visit www.sponsorshipsalesecrets.com

?P.S. You can also save the date and join me for my upcoming event, Sponsorship Sales Secrets Live 2022 - on Sept 23-24, 2022. To get more information and tickets, visit?www.sponsorshipsalesecrets.com

This article was written by Lori A. Manns, president of?Quality Media Consultant Group, a business consultancy firm that provides proven sales and marketing strategies to give small business owners more clients, greater brand visibility, and increased sales.?The original version of this article appears on the blog at www.qualitymediaconsultants.com.

Connect with Lori on?LinkedIn. Follow #loriamanns for more business tips and inspiration.