5 Sources of Side Revenue for Your Small Business

eggs basketOne of the most common problems I see with small businesses is they have all their eggs in one basket.

They have one form of revenue. Usually that means one type of product or service.

Then there’s some change or disruption in the market and it overturns their apple cart. Their failure to diversify kills them.

A lot of businesses are guilty of this. It’s not uncommon.

The solution is not to double down and deepen your investment in that one vertical. That would only exacerbate the problem.

The answer to market turmoil is to diversify your business – to create a more nimble business and look for opportunities to bring in revenue on the side.

You don’t give up your core focus, but you do think strategically about other opportunities.

The key here is to not have the side project get in the way of your primary focus. If you make, say, $100/hour as a consultant and you take a side gig doing proofreading at $50/hour, it will create problems.

The side gig will take time away which you should be spending on the $100/hour gig, and you’ll be less motivated to work on the $50/hour gig.

By the same means, if you have a flower shop and you start a side business waiting tables, that will take time away from your primary focus.

I’m also not talking about “get rich quick” types of moneymaking schemes – or work that gets in the way of your primary business.

When I talk about “side revenue” I mean ways in which you can leverage underutilized resources or create new opportunities for people to buy from you.

For example, take a look at almost any shopping mall. The main purpose of a shopping mall is to rent out spaces to stores. However, many malls have gathering spaces they may rent out for meetings.

There may also be bubble gum machines, soda dispensers, and massage chairs. The mall either maintains and manages the machines on their own, or they provides a small amount of space for other companies. Without having to put in much effort, they get revenue each month.

At my local mall, there’s even a train that kids can ride – at $3 a pop.

How can you make your business think like a shopping mall?

(OK, that sounds kind of strange. But you get the idea.)

All of these small measures can really add up.

For many small businesses, side revenue can make a big difference – the difference between bleeding red ink and being in the black.

A small newspaper in Poconos, Pennsylvania told its photographers to start taking photos of people in crowds at small events like football games and parades.

They they “post them online as photo galleries,” says editor Bill Watson. “In addition to drawing lots of hits online, we get reprint traffic off them.”

That one change generated about $3,200 from reprints of its photos – a big deal for a small newspaper.

Of course, every small business is different. But here are a few ideas about how to make side revenue:

1. Repurpose Existing Equipment

Do you have extra equipment lying around that you could make better use of?

I have a client who had extra commercial grade printers that were sitting unused much of the time. So he set up a side business where he does large-scale prints and prints photos on canvases for customers. It’s putting to better use equipment that otherwise would be just lying around.

2. Teach a Course Using Your Expertise

Turn your expertise or hobby into a course. Nearly everyone is an expert in something – or at least enough of an expert to teach others.

It’s become easier than ever to create a course. I recently interviewed one of the early employees at Udemy.com which allows people to very easily create, market and sell a course. They have popular courses in everything from how to play the banjo to photography to how to code HTML.

There are other companies doing the same type of work.

3. Add Revenue-Producing Machines On Site

Depending on the layout of your location – and whether you get a lot of traffic – you may be able to add on-site revenue.

One easy example is vending machines. Stick ‘em in the corner and forget about them. Either employees or the public buys snacks and you make money.

You can even have another company manage it so you don’t have to think about it.

Why stop at vending machines? What about candy dispensers?

It drives me crazy when I get my haircut and I see they have an empty chair or two. Why? Rent it out and make use of the space.

4. License Your Existing Work

If you are an artist or a photographer, you can license your work or place it on a website that allows the public to buy or license the prints.

If you are a writer, you can take something you’ve already written and put it on Amazon’s Kindle store. (Check out my interviews of Guy Kawasaki and Hollis Carter and Jonny Andrews if this is of interest to you.)

5. Sell Something New to Existing Clients

Once you have convinced a customer or client to spend $1 on your business, you have a much greater chance of selling them something else. So think about what other services you can sell current – or past – clients or customers.

I see a lot of consultants these days who are going back to their existing clients and offering “social media” consulting services.

6.  Sell Your Product in Other Ways and Other Locations (Bonus Tip)

When I interviewed Neil Gottlieb, the “Founding Twin” of Three Twins All-Organic Ice Cream, I was amazed to find out one of the fastest-growing ice cream companies in the U.S. started out with nothing more than one small scoop shop.

The company almost didn’t survive, because they opened in September 2005 – right before one of the wettest winters on record. No one wanted to buy ice cream for six months.

Now, they package and sell their ice cream in stores around the U.S. and internationally. They don’t have to worry about whether it’s raining in Northern California because it may be sunny elsewhere – and wherever that is, people are probably buying ice cream.

More Reading

If you are thinking about creative ideas for side revenue, check out Chris Guillebeau’s $100 Startup (referral link) — (here’s my video review. Or you can check out Chris’s guest blog post on Tim Ferriss’ blog, Six-Figure Businesses Built for Less Than $100: 17 Lessons Learned.

Photo credit: Flickr/Mrs. Logic