Would You like a feature Interview?
All Interviews are 100% FREE of Charge
The opinions expressed by Entrepreneur contributors are their own.
We all know that the advent of the digital age has revolutionized the way organizations operate, allowing them to explore new avenues of income with minimal investment. This is more true than ever for small businesses. For this group, leveraging e-commerce platforms and online marketplaces can create new opportunities. The average revenue increase from marketing investments for small businesses varies widely depending on a variety of factors, including the industry, target market, marketing strategies employed, and campaign effectiveness. However, companies that invest in strong marketing efforts typically experience average returns. 30% growth — some even more significantly.
By investing more time and resources into your online presence, even small businesses can tap into a global customer base that was previously out of reach, increasing your revenue potential and increasing your revenue potential. It becomes easier to manage operations. One size does not fit all, and strategies vary depending on your business industry. There are a few things to consider here.
Related: Considering franchise ownership? Get started today and take this quiz to find a personalized list of franchises that fit your lifestyle, interests, and budget.
service bundle
Developing service bundles or packages can be a strategy for increasing revenue without overextending your operations. By combining products that are compatible with existing core services, companies can increase their revenue streams while providing added value to their customers.
For example, a graphic design company can bundle branding, website development, and social media management services to provide clients with a comprehensive marketing package. This approach attracts new customers and fosters customer loyalty as customers perceive the convenience and cost-effectiveness of bundled services.
Subscription models and strategic partnerships
Subscription-based business models have become increasingly popular in recent years, providing a stable revenue stream and encouraging customer loyalty (think Netflix and Amazon Prime). Small businesses can creatively implement industry-specific subscription models to generate recurring revenue.
For example, Software-as-a-Service (SaaS) companies can offer tiered subscriptions with different features and benefits, enticing customers to upgrade for additional services. By continuously delivering added value, brands can maintain a loyal customer base while increasing revenue opportunities.
Working with a strategic partner can be a game-changer for small and medium-sized businesses seeking new revenue streams. By collaborating with like-minded organizations, you can leverage each other’s resources, expertise, and customer base. Partnerships offer a variety of collaboration opportunities, such as joint marketing initiatives, cross-sell promotions, and joint ventures, and have become a popular alternative to an outright sale (or merger) of a business.
Related: Want to become a franchisee? Run this checklist first.
License and Franchise
Licensing or franchising can be a viable option to expand your revenue streams without diversifying your business too much. This approach allows companies to generate additional revenue by granting others the right to operate under an established brand and proven system.
Franchising offers a low-risk path to expansion because the franchisee manages the financial and operational responsibilities. This strategy has proven successful in a variety of industries, from fast food to fitness studios to commercial cleaning.
Adjusting strategies to meet challenges
While the principle of creating new revenue streams applies to businesses of all sizes, small businesses in particular often face unique challenges. Limited resources, tight budgets, and small market segments require careful planning and creative thinking.
These companies must focus on niche markets and identify specific unmet customer needs to gain a competitive advantage and attract a loyal customer base.
Related: Is franchising right for you? Ask yourself these nine questions.
Five examples of common business concepts that increase revenue:
- Consultation service: Professional services firms, such as law firms and accounting firms, can expand their business by providing specialized consulting services in niche areas. For example, a law firm specializing in intellectual property can provide consulting services to startups seeking patent and copyright protection.
- Rental service: Small retailers can take advantage of underutilized inventory by offering rental services. For example, a high-end fashion boutique can rent out designer dresses for special occasions, creating an additional revenue stream while maximizing the value of its inventory.
- Customization and personalization: Small manufacturing companies can differentiate themselves by offering customized or personalized products. This includes engraving, monogramming, or customizable features according to individual customer preferences, allowing you to charge premium prices for customized products.
- Membership program: Fitness centers and gyms can implement tiered membership programs that provide additional benefits to members. This may include exclusive access to specialized classes, personal training sessions, or discounted rates on related services, with recurring revenue generated through membership fees.
- Value-added services: Small restaurants can increase their revenue by offering catering services for events and parties. Additionally, consider partnering with local businesses that offer bundled services such as catering and venue rentals to provide a seamless experience for your customers and generate additional revenue streams.
Developing additional revenue streams is a key strategy for companies aiming for sustainable growth and relevance in an evolving market. Organizations can develop new revenue streams by adopting digital platforms, creating service bundles, implementing subscription models, forming strategic partnerships, or exploring licensing opportunities.
For small and medium-sized businesses, prioritizing scalability and customer-centric strategies is critical to maintaining operational efficiency while pursuing revenue diversification. By pursuing innovative approaches, you can create new revenue streams and position yourself for long-term success.