How to add new revenue streams to a services business? By Robert Trosten
It can be lucrative for a business owner of home improvement or other services to create additional revenue sources. It is particularly relevant for anyone offering seasonal services as income gets hit during the slow periods. Robert Trosten says, if you add other revenue lines, you can keep critical staff members with you, have visibility in the market, and earn new clients. Also, you can make better use of unused assets. Just make sure these are relevant for you, though. Otherwise, these can spoil your profits. To figure out whether this exercise would be fruitful or not, you can rely on four key factors. Here is a quick look into them.
Robert Trosten: Factors to consider before adding new revenue line
As a services business, you have to know your target audience right. You can offer a wide range of home improvement services to your customer base. Suppose you don’t provide window washing or gutter replacement help. You may think of banking on these opportunities. Still, you have to figure out who will be more interested in these. For example, homeowners of a large house with steep roofs can be one group. For gutter services, the other group can be people living in older homes. Are you sure targeting these new groups will be advantageous? You have to assess this before concluding anything.
Ease of new revenue stream
According to Robert Trosten, convenience can be one of the significant factors for introducing a new revenue source. You have to know what assets you need for the new option and how to master that area. If you have to invest a considerable sum of money or time, you may not consider it worthwhile. On the other side, if you hire a specialist for assistance, the task can look simple. Anyway, you have to make up your mind about taking the risk.
It can be the most overlooked aspect, but it can help create revenue if one thinks about it properly. For example, you can target your window washing clients for gutter services too. Since attracting new customers tends to be expensive, you can adopt this cost-effective strategy. Experts also believe that you need to spend less on the old customers.
In the home improvement business, you receive payment only after completing the service. But doing a gutter replacement business can be something different. You have to collect a lot of materials before even getting the appointment. You don’t need this for a service like a window washing. So, does it make sense for you to take this risk?
Your entrepreneurial spirit may tell you to plunge into risks if that is what it takes to run a successful and sustainable business. However, you cannot make an emotional decision. You have to weigh your options well. Approach all the pros and cons objectively to understand where you can win or lose. Only when you have the confidence to pull it off shall you go for a leap of faith. Along the process, you can make changes to align it with your primary business.