April 14, 2024

Opinions expressed by Entrepreneur contributors are their own.

We all know that the rise of the digital age has revolutionized organizations’ operations, enabling them to explore new income avenues with minimal investment. This has never been truer for small businesses. For this group, embracing e-commerce platforms and online marketplaces can catapult them into new opportunities. The average revenue increase by investing in marketing for a small business can vary significantly depending on various factors such as the industry, target market, marketing strategies employed, and the effectiveness of the campaigns. However, businesses that invest in strong marketing efforts typically experience an average revenue growth of 30% — some significantly more.

Investing more time and resources toward their online presence allows even the smallest businesses to tap into global customer bases that were once out of reach, boosting their revenue potential and keeping operations manageable. One size does not fit all, and strategies depend on your business industry. Here are some to consider.

Related: Considering franchise ownership? Get started now and take this quiz to find your personalized list of franchises that match your lifestyle, interests and budget.

Service bundles

Developing service bundles or packages can be a winning strategy to expand revenue without overextending operations. By combining existing core services with compatible offerings, businesses can provide added value to customers while increasing their revenue streams.

For example, a graphic design agency could bundle branding, website development, and social media management services, offering clients a comprehensive marketing package. This approach attracts new customers and promotes customer loyalty, as clients recognize the convenience and cost-effectiveness of bundled services.

Subscription models and strategic partnerships

Subscription-based business models have become more prevalent in recent years, offering steady revenue streams and fostering customer loyalty (think Netflix and Amazon Prime). Small businesses can creatively implement subscription models tailored to their industry to secure recurring income.

For instance, a software-as-a-service (SaaS) company can offer tiered subscriptions with varying features and benefits, enticing customers to upgrade for additional services. By continually providing added value, brands can maintain a loyal customer base while expanding their revenue opportunities.

Collaborating with strategic partners can be a game-changer for small businesses seeking new revenue streams. By joining forces with like-minded organizations, they can leverage each other’s resources, expertise, and customer bases. Partnerships offer a variety of collaborative opportunities, such as co-marketing initiatives, cross-selling promotions, and joint ventures, making them a popular alternative to outright selling (or merging) a business.

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Licensing and franchising

Licensing or franchising can be a viable option to expand revenue streams without spreading operations too thin. This approach allows businesses to generate additional income by granting others the rights to operate under their established brand and proven systems.

Franchising provides a low-risk path to expansion, as the franchisees manage their financial and operational responsibilities. This strategy has proven successful in many different industries, from fast food to fitness studios to commercial cleaning.

Tailoring strategies to address challenges

While the principles of forging new revenue streams apply to businesses of all sizes, small businesses, in particular, often face unique challenges. Limited resources, tight budgets, and a smaller market segment necessitate careful planning and creative thinking.

These businesses should focus on niche markets, identifying specific unmet customer needs to carve out a competitive edge and attract a loyal customer base.

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Five revenue-boosting examples for common business concepts:

  1. Consultation Services: A professional services firm, such as a law or accounting firm, can branch out by offering specialized consultation services in niche areas. For instance, a law firm specializing in intellectual property could provide consultation services for startups looking to protect their patents and copyrights.
  2. Rental Services: A small retailer can leverage underutilized inventory by offering rental services. For example, a high-end fashion boutique can rent designer dresses for special occasions, creating an additional revenue stream while maximizing the value of their inventory.
  3. Customization and Personalization: A small manufacturing company can differentiate itself by offering customized or personalized products. This could include engraving, monogramming, or customizable features that cater to individual customer preferences, allowing them to charge a premium price for customized offerings.
  4. Membership Programs: A fitness center or gym can introduce tiered membership programs that offer additional benefits to members. This can include exclusive access to specialized classes, personal training sessions, or discounted rates for affiliated services, generating recurring revenue through membership fees.
  5. Value-added Services: A small restaurant can expand its revenue by offering catering services for events and parties. Additionally, they can explore partnering with local businesses to offer bundled services like catering and venue rental, providing a seamless experience for customers and generating additional income streams.

Developing additional revenue streams is a key strategy for businesses aiming for sustained growth and relevance in an evolving marketplace. Organizations can unlock new income sources by adopting digital platforms, creating service bundles, implementing subscription models, forming strategic partnerships, or exploring licensing opportunities.

For small businesses, it’s crucial to prioritize scalability and customer-centric strategies to maintain operational efficiency while pursuing revenue diversification. By pursuing innovative approaches, they can forge new revenue streams and position themselves for long-term success.

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