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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
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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.

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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:

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  • 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.

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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.

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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.

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Featured photo credit: StevePb via pixabay.com

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Roxana Nasoi

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Last Updated on July 20, 2021

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There

Financial Freedom is Not a Fantasy: 9 Secrets to Get You There
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Have you ever considered your life now, and how it would be if you had more time to spend with your family and less worries about money?

Nowadays, financial stress is one of the most troublesome weights in life. If you’ve ever encountered financial stress, you know the difficulty of not having enough income to pay your obligations or bills.

Many people say that money is not the ultimate goal of life. While that’s true, money certainly plays a very significant role. The meaning of financial freedom changes with the different phases of our life, but ultimately, it is something that many people strive for.

In this article, we’ll explain how to capture that financial freedom you’ve been looking for. Read on to learn the secrets to financial freedom.

Break Free of Your Finances

Financial freedom is about having a constant flow of cash from your assets to cover all your regular needs.

When you are not worried about your income, or living paycheck to paycheck, you gain a great sense of freedom. It’s the freedom to be obtain and do what you truly need to make your way through everyday life.

Gaining financial freedom, though, is a process of growth, making small improvements and gaining emotional strength.

Though it seems hard to believe, it is really very simple to get financial freedom.

To do so, you simply need to make sure that your assets exceed your liabilities. In other words, you’ll need to find the sweet-spot where your residuals meet or surpass your expenses. This is something that you can achieve with the proper plan.

While not every person will accomplish financial freedom, the potential for anyone to do so is certainly there. Anyone can achieve this success, regardless of their income level.

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Outlined below are 9 secrets that will help you in your goals of achieving financial freedom.

1. Stop Unnecessary Spending

We often spend money inwardly, instead of objectively.

For example, you may spend when you’re anxious, depressed, restless, exhausted, from fear of missing out, or to please others. This is a very unhealthy way to handle your finances.

To stop this habitual spending, log down all your spending over the course of a month.

Just as some people keep a food diary, keep an expense diary. Remember not to just write down how much and what you spent the money on, also include the circumstances of why you spent the money. Was it an impulse buy at the checkout line or was it something you planned to purchase?

This increased self-awareness could enable you to avoid triggering situations in the future when you are considering an impulse buy.

2. Plan a Monthly Budget

This is a great opportunity to get serious.

Take a seat with your spouse or partner and make a monthly budget based on your income, not your expenses. You are never again going to spend more cash then you have on hand.

Overspending is the thing that led you to more financial obligations. Make sure you decide every month what is coming in and what will be going out and stick to that budget… no matter what.

3. Cut-up Credit Cards

Perhaps you are the type of person who always pays your credit card balance in full before the end of your billing cycle, and enjoys the reward points you gain. If this is the case, then you’re already way ahead of the game.

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If not, you may want to consider ridding your life of the burden that credit cards bring.

Many cards have strategies set up so that if you make a certain number of late payments, they will raise your interest rate much higher. This can really add up in the long run and you won’t be doing your financial situation any favors. If you’re prone to late payments or have a large balance due on your cards, cut them up!

Without proper self control on credit card spending and payments, you are basically throwing your money away. To ensure that you have better control over your spending, use only cash or debit for all future purchases (and don’t forget to pay at least your minimum payment on your cut-up cards each month!).

4. Increase Savings

There is no doubt that for a comfortable retirement you must accumulate satisfactory savings throughout your working life.

It’s good practice to save up to 15% of your income.

Start with your workplace 401(k), if you have one. If not, a Roth IRA (if you are eligible) or a traditional IRA (if you are not eligible for the Roth) are the next logical steps.

Increase in longevity means you might be able to look forward to 25 to 30 years in retirement, or possibly even significantly more. Investing now in good retirement plans will ensure that you have a guaranteed a stable monthly income when the time comes to stop working. [1]

5. Invest Wisely

Consider investing in funds.

Specifically, you will gain higher returns if you invest in different types of mutual funds such as Debt funds, Equity funds and Hybrid funds with a proper balance, although it absolutely relies on your personal preferences and sense of risk taking.

To get the most of these benefits, make sure you are investing in a variety of assets. Another resource of investing in mutual funds is SIP (Systematic Investment Plan) where you invest some money every month in funds. SIP works by averaging the per unit price of the stock.

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Mutual fund investors are aware of the benefits of an SIP (Systematic Investment Plan). For one, it is the most secure way to invest in equity mutual plans so that wealth is created over a long period of time. This plan also helps you to gain a better sense of financial discipline, which will come in handy in all your financial endeavors.

6. Invest in Gold

There isn’t really a better way to invest in gold than to have the physical gold itself in your possession.

You can purchase gold coins and bars from mints as well as from coin dealers and other private sellers.

Another way to invest in gold is through ETFs (Exchange Traded Funds).

These are is similar to mutual funds but they are exclusively investments of gold. ETFs are great because they offer more liquidity; the ETF owns the actual physical gold, stores it, and retains the value of the shares. These shares can then be bought and sold in the stock market, and one big benefit is that the transaction costs of gold ETFs are much lower than the that of physical gold.

With its consistently-increasing demand, investment in gold can be very wise long-term investment to make.

7. Stash Emergency Funds

Whether it’s a cash gift or a work bonus, always try to save any extra money that comes your way rather than making unneeded purchases.

If you get paid every other week, you’ll get an “extra” paycheck (three rather than the usual two) twice a year. Either save those paychecks towards your emergency funds or utilize the money to pay down other obligations, such as loans, credit cards or other debts.

Make it hard to get your cash.

Put your savings in an alternate bank, maybe an online bank that forces you to delay for several business days before transferred money hits your regular bank account.

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8. Find Fabulous Mentors

Find a mentor, such as a friend or family member, who has exceptional control over their finances and pay attention to everything they do.

If you do not have any friends or family that are enjoying financial freedom, then find a mentor online! There are numerous blogs and guru websites featuring the advice of many people who have reached financial freedom, and they exist primarily to let you in on how to achieve it for yourself.

There are also plentiful forums available that share tips and tricks on how to best achieve financial freedom. Read as much as you can and start changing your habits for the better.

9. Be Extra Patient

Patience is the key of financial success.

Being patient can be quite tough, especially when you’re struggling with your finances, but having faith is worth it. You’ll continuously be on the right track if you are taking the proper steps above.

So don’t be discouraged, even if you are only saving a few dollars a month; it all adds up. Within just a few years you’ll look back proudly at your accomplishments and be glad that you had the patience to get there.

Financial Freedom for All

Anyone can achieve financial freedom, regardless of their financial circumstance.

Use the tips provided above to get yourself on the track to financial freedom and toss your monetary concerns out the window. If you wish to achieve a life with financial freedom for yourself and your family then you must adopt a disciplined approach towards your finances.

Following the simple secrets above is a great start to making your money work for you, so you can work less and live more!

Featured photo credit: rawpixel via unsplash.com

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Reference

[1] Hartford Gold Group: IRA Retirement Accounts

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