Finding new sources of revenue could mean survival for your business. If your business has taken a hit during this COVID pandemic economy, then new streams of revenue could be just the vaccine your business needs. Congress has lent some business relief and assistance — although more than 13% of businesses refused to take the help due to mistrust, hassle, or concern over eligibility. What can your business do to help itself?
How Has COVID Impacted Small Businesses
You know as well as anybody how the pandemic has affected small businesses — and the smaller the business, the bigger the impact. Some, like restaurants and salons, have seen the deepest wounds. Others have experienced what might seem like business-as-usual, at least to some extent. The rest of American small businesses have had to make adjustments.
- 43% of businesses were temporarily closed
- Employment has fallen by 40%
- “Approximately two-thirds of respondents have pivoted to new revenue sources or adapted their business model in response to the current crisis.”
- 32% of PPP loan recipients already have laid off employees or cut wages
- 51% reported a significant decrease in sales due to the pandemic
Strategies For Generating New Revenue
Chances are good that your business has been significantly impacted by the virus economy. So, what can you do? Finding new revenue is key. You may pivot your entire business, or you might find new revenue sources.
There are three basic strategies for adding new revenue:
- Pivot: It might be time for a complete business pivot. A pivot means taking your business in a whole new direction, almost a restart. Learn more about how to pivot during COVID.
- Go Deep: This means adding new products or services that are a natural extension of your existing product line. This allows you to sell new products to your current customer base. Think, “Would you like fries with that?” Add some fries to your orders.
- Go Wide: Going wide means broadening your market. That could mean adding new geographical territories, new segments, new markets or industries, new sales channels, etc. This is a marketing exercise to connect with new customers with existing products.
5 Ways To Create New Revenue Streams
Once you decide on one or more of those strategies, consider these ideas for finding creating revenue:
- Packages: Just like the telecommunications companies (and fast food joints), you can increase your revenue per sale by bundling or packaging services and products.
- Pricing Updates: If it’s been a few years since you updated your pricing, you may be due for an increase. Do this in phases as a test. Everyone is having a hard time out there, so don’t make it harder. At the same time, you can make sure you’re charging market rates and getting the revenue you earn.
- Go Digital: Take your products and services into a digital format. Some of these can be offered for a monthly recurring fee.
- Longer-term Contracts: While this may not be brand new revenue, it is a way of securing your revenue. Preventing loss of revenue has almost the same effect on your business. If you offer month-to-month or other short-term contracts or agreements, consider going longer-term – a year or more.
- Turn Supporting Services Into Products: Often, businesses put a lot of work into supporting a product or service — for free. As you look at your processes, do you see anything your team is doing that could be turned into its own product and create new revenue?
How To Identify Opportunities For Your Business
At this point, you may be inspired to start creating these new revenue streams to help your business survive the pandemic economy. The next step is to do a thorough review of last year’s performance, of your business plan, of your current revenue streams, and of any input or feedback you’ve gotten from your customers, vendors, and employees. That’s a lot of data to sift through. We can help you go through that and pick just the right solution for finding these new revenues.