Advertising
Advertising

Entrepreneur Corner: 5 Ways to Generate and Preserve Revenue Streams in Your Startup

Entrepreneur Corner: 5 Ways to Generate and Preserve Revenue Streams in Your Startup

On average, approximately 90% of startups fail to become successful. Most common reasons for failure include insufficient funding, low break-through rate, too many expenses, poor revenue streams. Being in one of the following markets gets you a higher chance to survive: IT, finance, real estate, education, health, services, and wholesale. Over 50% of businesses in these industries seem to still be active after 4 years(Tech.co: Startup Failure Rates Industry 2016). But don’t give up if you’re in a more challenging market. In support of young entrepreneurs, here are five ways to generate and preserve revenue streams in your startup, to meet day’s end.

Freelance Work and Independent Contracts

With freelancing as an emerging trend and more legal backing up, this type of work can prove helpful in the early days of a startup. As a Founder, you have many responsibilities including the financial well-being of your employees. Your Facebook or LinkedIn account may read “CEO”, but it’s more of a “title” with a leadership role than it is a financial bliss. Living off dividends takes about a year, literally, so freelancing and independent work can be a great solution to cover your own expenses and generate extra revenue for other purposes. Many stories among entrepreneurs start with “I did freelancing work while also working on my startup company,” so there is nothing to feel ashamed of. It is a great way to enhance our skills, acquire new ones, get a deeper understanding of the business world and, last, but not least, build a personal brand.

Search for opportunities in the market consisting of consulting contracts that pay a good hourly fee, or even short-term projects with fixed payment terms, locally or remotely. Services and products are a great way to generate extra income and form long-lasting relationships with clients which might prove beneficial for your startup’s future, as well.

Advertising

Creative Finance: Selling Items That Have a Story

There has been an increased demand on the market in the past few years for vintage items, from watches to diamonds and unique jewelry. Perhaps a Hollywood or VIP-inspired trend, second-hand expensive items are a great way to generate an additional revenue stream, especially if they have a story to back them up. Here’s how you can do it:

  1. Sell your items to a pawnshop or jewelry retail store. When selling locally, shop around various stores to see who can offer more.
  2. Sell your items on eBay, online. Good chance to get a good price if the buyer is knowledgeable and the seller knows how to pitch the right angle, plus present the uniqueness and quality of the item.
  3. Sell on Craig’s List. Similar to eBay, but with the probability of encountering more scammers, since the platform isn’t as reliable as it used to be. Same conditions apply: knowing the exact worth of your item, plus solid negotiation skills.
  4. Sell your items to an “expert buyer”, directly. While you can sell your diamonds, jewelry and watches on platforms such as Craigslist or Ebay, selling to online diamond buyers such as WP Diamonds is a faster and safer option. Transactions are done fast, usually, in less than 48hrs and the agency covers the FedEx fee for shipping your items to their store.

Please note that this is an alternative way to generate additional revenue, and not necessarily a long-term solution. However, in the early stages of startup life, it can be your hidden Superman.

Smart Renting, Even Smarter Subletting

We all heard about the success story of AirBnB. Following the example of the founders, you can make use of renting spaces and apartments or rooms to generate more revenue. As a local, you have access to cheaper prices if the contract allows and not restricts you to sublet a venue or an apartment (in case you don’t own it). Tips:

Advertising

  • rent or own an apartment or venue in a centrally-located area; it is more attractive to potential guests and preferred by most travelers and nomads;
  • either rent the whole apartment (see real estate laws in your area) or just one room for 1-to-3 months. This can get you to at least cover the monthly costs for the place, and even generate some profits;
  • rent a venue or an office for your startup that allows 24/7 access. Sublet to nomads or freelancers who prefer to work during the night. I.e. If you’re based in the US, but have clients from Europe, the 7-9hrs time difference can be covered if you work during night-time when it is daytime over there;
  • Allow small groups to organize weekend events in your space;
  • Organize networking events yourself – great way to generate additional income and meet people;
  • Synchronize your holidays and vacations, so that no one is really at the office. Sublet the office space during your travels;
  • Work from home with your entire team 2-3 days per week. Apply the same strategy when no one is around at the office;
  • Share your office space with another startup and split the costs. Ideally, a company that offers different services, which you can both combine.

Warning: Pay attention for the legal part. Some real estate property contracts do not allow you to sublet your venue or your apartment, partially or fully to another party unless you notify the actual landlord.

Safety Measures for Your Business Contracts

This is more about preserving revenue streams. Newsflash: the US government’s tech budget is 8 times that of Apple. Translation: there’s a huge interest in Federal funding for tech startups, with a special cater towards cyber security. Big players in Federal IT contracts in 2016, apart from the Defence Department, include CSRA Inc., Lockheed Martin, HP Enterprise, Booz Allen Hamilton and Accenture(Bloomberg Government: Tech Startups Struggle to Tap 82 Billion in Federal Contracts). Tech&IT is a good industry to be part of and everybody can get a slice from this cake. But don’t worry, other industries are profitable if you know how to tie loose ends.

Independent of the industry, there are always risks: bad clients, dishonest employees, dried funds etc. How can you protect your business from all this? While being aware and cautious can save a few sweats, there’s no service that covers all risks in one go. But specific services cover certain risks. For example, a good lawyer will be a great asset when dealing with risky contracts. A handy accountant will know exactly what to do to prevent huge financial losses. An experienced Business Development Manager can help you in getting good clients and keep a nice clean client portfolio.

Advertising

There is also a way to keep your clients and your business safe from employee dishonesty, which is not easily detectable by HR, Talent Acquisition or Occupational Health departments. A coverage called fidelity bond that has your back, so to speak. This infographic by JWSuretyBonds explains the costs involved with each coverage plan. While fidelity bonds imply a flat cost based on the amount of coverage amount needed and the number of employees, other types of bonds have flexible fees, influenced by personal credit history, financial expertise in the company (good accountant, as mentioned before), equity left in your company and more.

Crowdfunding for New Products and Services

Why crowdfunding, when everybody does it, nowadays? Well, there’s a right way to crowdfund your product and it’s called “pre-ordering”. In my brief experience with this strategy, I learned that perks are everything. People want to know what they are donating for. Just giving them “a thanks” for $5 won’t cut it. Give them a signed handwritten letter or custom postcard from you, then that might be worth the $5. The best way is to give your community the chance to pre-order the service or product. Be in a book, course, physical product, online or offline service. Doesn’t matter. What matters is this simple principle of “what you pay is what you get”, taken to a different level. Crowdfunding is a great way to get you covered, and not a way to generate profit or revenue. This strategy purely helps you cover specific costs and preserve the revenue you already have.

There’s a lot to cover about crowdfunding. From experience, the pre-campaign can generate up to 30% of your funding goal in the first 3 days. And to prepare for that, you need about 6 to 8 weeks in advance, campaign booster services, a pool of influencers and thought leaders that are backed by a community.

Advertising

Resources you can use to document the process include Crowdfunding PR, Donor Search, CrowdCrux’s list of influencers in Crowdfunding you can connect with via Twitter, IgnitionDeck and more. I found BackerCamp to be the only honest campaign booster service, the Founder responded to my email in a time fashionable manner and told me it was too late to do anything for one of the campaigns my friends and I launched this year on Indiegogo. Other campaign booster companies were thrilled with the idea and went straight for the money.

Final Thoughts…

Keep going forward, no matter how hard it is to generate or preserve the revenue you already have for your startup. Use any of the 5 ways mentioned above, and even a combination of two or more. See what works best and continue implementing the improvement process. Maybe freelancing is a good option for you. Or selling your grandma’s old jewelry. Perhaps renting and subletting can save you more than just a few pennies. Or use surety bonds and crowdfunding to keep the funds you already have and secure a better relationship with your clients and your community. Bottom line: don’t give up!

Entrepreneurship is one challenging ride, but if you’re cut for it, it’s worth every sweat.

 

Featured photo credit: StevePb via pixabay.com

More by this author

Roxana Nasoi

Jedi of all kinds

Freelancing Success 35 Tools and Resources to Absolutely Hack Your Freelancing Success valentine's destinations digital nomads The Top Five Valentine’s Day Destinations for Digital Nomads Ways to generate and preserve startup revenue streams Entrepreneur Corner: 5 Ways to Generate and Preserve Revenue Streams in Your Startup Entrepreneurial Stress: 10 Scenarios and Their Solutions startup launch Startup Launch: 3 Ways to Get Your Business Ready for Takeoff [Infographic]

Trending in Money

1 9 Millionaire Success Habits That Will Inspire Your Life 2 How to Set Financial Goals and Actually Meet Them 3 How to Develop a Millionaire Mindset in 6 Simple Steps 4 How to Eat Healthy on a Budget (The Definitive Guide) 5 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2020

Read Next

Advertising
Advertising
Advertising

Last Updated on April 28, 2020

9 Millionaire Success Habits That Will Inspire Your Life

9 Millionaire Success Habits That Will Inspire Your Life

As technology evolves and information becomes more accessible, it has also become more challenging to define success. A lot of people are trapped in the rat race while trying to discover the actual formula for success.

You could become overwhelmed with what tools, techniques or philosophies to imbibe while trying to get tips over the internet. At every click and turn, there are ‘how-tos and quick-fix’ on how to become successful overnight. You will find several courses, articles, videos and books on how to achieve financial success.

But what if I tell you it doesn’t have to be complicated as people made it out to be? What if you could achieve success by merely following these 9 millionaire success habits?

1. Read for Personal Development

A daily habit I have discovered millionaires share in common is reading. For instance, if you are an entrepreneur, you need to read to become an efficient leader and a productive business owner. Reading helps you to grow and learn without going to a business school.

A research conducted by Thomas Crowley indicates about 85% of self-made millionaires read at least two or more books each month. [1] Warren Buffett is one of these examples. He spends 80% of his day reading. In the early days of his investment career, he would read 600 to 1000 pages in a single day.

While millionaires sometimes read for pleasure, they also learn to improve themselves. They read topics on leadership, how-tos, self-help, biographies, lifehacks and also follow current events.

Here’re some recommendations for you: 25 Best Self Improvement Books to Read No Matter How Old You Are

2. Establish Multiple Sources of Income

Another success habit I noticed about successful people is that they don’t depend on a single income source. Every millionaire possesses multiple sources of income. This helps them to manage economic challenges and also make more money.

They are passive income addicts. They earn interests from loans, rental income from real estate, royalties from intellectual properties, dividends from investments. They also launch a side business or run a website or sell information products.

How income is made either passively or actively is what separates the successful from the wannabes. They are always learning ways to build multiple streams of income.

Advertising

3. Live on a Stipulated Monthly Budget

An average millionaire does not believe in luck and jackpot. They take the time to understand cash flow-income and expenses. Based on this, they establish a monthly budget and religiously stick to it.

The essence of the budget is to minimize unnecessary expenses. This will help you gain complete control of your financial life. Budgeting helps you to avoid overspending to achieve your financial goals. Here’re some tips to help you stuck to your budget: 32 Hacks for Sticking to Your Budget

4. Manage and Maximize Money

The most significant education for a millionaire is financial intelligence. Nobody attains financial freedom without gaining financial intelligence. This is the more reason millionaire, regardless of their income, keep their knowledge about tax strategies updated.

They always seek to reduce their tax bills. One approach they employ is by living or incorporating their business in states with no income tax.

Do you know that about 60 companies paid $0 legally in the 2018 tax year? Some of these companies that ‘avoided'(note: not evaded) federal income tax include Chevron, Amazon, Halliburton, General Motors, Delta. Their US income was totaled at $79 billion with an effective tax rate of -5%.

What’s the deal? They got a tax refund.

How do they accomplish these?

An ITEP report indicated that they have the culture of throwing huge sums at tax experts who assist them in discovering creative, as well as convoluted means of paying little tax as much as possible.[2]

5. Avoid Debt

Another habit that separates the millionaires from the rest of the world is how they manage debt.

They don’t live an extravagant lifestyle; instead, they only buy what they need and can pay for. They do not book hotels and flights by using their credit cards to pay for them.

Advertising

They are conscious of the interest rates even when they use credits cards or take loans. If possible, they try to pay with cash because of its zero percent interest rate.

6. Set Daily Goals

It does not matter if they are setting up a business, a career, or financial projections; they have the success habit of setting short term goals. They plan daily and weekly goals to generate momentum in achieving their long-term goals.

Ensure you prioritize when setting daily goals. This will help you to achieve the most important to-dos on your list.

Setting priorities will help you to focus on highly rewarding activities. If you desire financial freedom, it is wise to pursue activities that earn you thousands of dollars rather than hundreds of dollars.

7. Don’t Act Rich

The goal is not to act rich but to be productive. Interestingly, Thomas Stanley buttressed in his book that for the most prestige brands of cars, about 86% percent are toys of the non-millionaires. While most believe that people with huge fortunes tend to drive exotic cars, in reality the largest consumers of pricey cars are aspiring millionaires.[3]

According to findings by Experian Automotive Researchers, 61% of individuals who earn $250,000 or more rarely buy luxury brands. Instead, they buy Hondas, Toyotas, and Fords like the rest of the world. The reason is they are not ready to spend money on premium cars that tend to drop in value in a couple of years as it would cost money. Millionaires invest in assets that appreciate.[4]

8. Own or Buy Businesses

In Robert Kiyosaki’s cashflow quadrant, he divided how you earn income into four quadrants. The E and the S quadrants take the left position while the B and the I are on the right side. According to Robert, it is possible to be on all quadrants, but the millionaires are not.[5]

  • E stands for employee – they work for others
  • S stands for self-employed – they work for themselves
  • B stands for a Business owner- employees work for them (500 or more employees)
  • I stand for Investors – Money work for them like Warren Buffet.

Your goal is to move from the left quadrant to the right quadrants where you own big businesses or make money work for you.

It is possible to become financially successful by pursuing what you love. For instance, if you love writing, aspire to be the best seller. Wealth and passion work together.

Check out How to Start a Small Business with Little to No Money for tips.

Advertising

9. Avoid Get-Rich-Quick Scheme

A millionaire holds patience as an essential virtue. It takes patience to become successful, not only in finance but in every aspect of life. While it is possible to become financially successful at an early age, most millionaires hit it at age 50. They live a moderate life, invest in their future and retire rich.

Bonus: How to Develop the Millionaire Success Habits?

Having learned these habits, the next question is,

How can I develop the Millionaire Success habits?

Here are six values you will need to develop:

Establish Your Life Vision

You need to be clear about what you want in life to set yourself for a life of success. Your vision has to go beyond becoming a millionaire to understanding why you want to become one. Any great entrepreneur you will ever find has a clear vision and an established mission.

Understanding why you are doing what you do will drive you to become the kind of successful person you want to be.

Make Your Passion a Profession

When your passion becomes your profession, work becomes pleasurable. Loving what you do enables money to flow to you and through you.

So what’s going to be? Wake up every morning by speaking positive words into your work, love what you do, and focus on the work that brings you joy.

Take a look at this article and learn how to make it happen: 5 Steps To Turn Your Passion Into A Career

Focus on Solution

Focusing on the solution means establishing the problem that you or your business address. This will help you focus on the solutions when others are faced with challenges.

Advertising

A millionaire has a mindset that is fixed on the solution. He or she knows there’s a way out, and that every problem is an opportunity in disguise.

Improve your problem solving skills with these tips: 6 Effective Ways to Enhance Your Problem Solving Skills

Develop Your Leadership Skills

Leadership skills are an asset that is indispensable if you want to develop a millionaire success habit. The more you hone your leadership skills, the more you will attract leaders who share your values.

Be Growth-Focused

Millionaire entrepreneurs prioritize self-improvement. Here’s how to achieve it:

  • Get a coach. Coaching will impact your life, and you will achieve peak performance in life and business when you have a life coach.
  • Be coachable. It is not enough to have a coach; you must be coachable. Sometimes, you need feedback and counsel to reposition your life and business. A coach has the wisdom and experience to counsel you from a higher perspective. The more you receive feedback and work on yourself, the more you become better at what you do and who you are.

Flip Your Thought Pattern From Acting To Being

It is not enough to have a millionaire success habit, you must also become a person of positive influence. This is how you can become significant. Bill Gates is not only rich; he is changing lives in Africa and different parts of the world.

If you want to become successful, you must first be and think like a successful person. This is how resources you need can flow into your life.

Here’s a final thought from me:

It is not enough to do something to have something; success is about being someone who possesses what is needed to take positive and inspired actions.

More Success Habits

Featured photo credit: Austin Distel via unsplash.com

Reference

Read Next