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Local Business Owners: Diversify Your Income Streams

COVID-19 has been pretty tough for most local business owners. They’ve seen revenue streams dry up and profits dip drastically. For those with a retail store, shopping ceased. For those offering services, many had to immediately stop offering them. Most businesses had to innovate and pivot very quickly to stay alive and it meant changing the distribution of products, services, or experiences.

Almost every business created an e-commerce offering or ramped up their social media to sell through Instagram Stories in a creative way. Many in-person local events found a way to go virtual and still create a ton of value for the attendee.

Although most of these changes were done out of necessity, I believe some of the shifts have allowed businesses to serve their customers even better than before!

For example, we loved watching our retail stores make it easier than ever for customers to shop. Personally, I know with my schedule it’s hard to make it to a certain part of town during specific hours of the day when my favorite local store is open, so being able to shop on Facebook or Instagram at my leisure was incredibly helpful and convenient. 

We live in a convenience society (thanks, Amazon Prime!) so the easier you can make it to engage with your brand, the more likely you’ll gain customers.

Shifting your distribution channels isn’t what we’re diving into though.

Today, we’re talking about different income streams. By diversifying your income streams, not only are you able to rely on a few different sources of $$, but if and when a global pandemic happens, you’ll be in better shape if one stream of revenue dries up because you’ve got three other ones.

We’re covering eight different income streams you can add to your local business.

Not all of them are right for every business but there may be an opportunity or two you might want to consider investing in so you don’t have to rely on only one way of making money.

1. Events

The first one I want to dive into is events. Events are a great way to draw in your current customers while also expanding to the broader community. One way to create an event that draws in revenue is to bring in someone who is an expert in your industry (or yourself!) to hold a workshop or a class on a topic your customer is interested in. 

SPEAKER SERIES

Let’s say you’re a chiropractor. You could start a speaker series and bring in a variety of experts on different subjects each week, for 12 weeks. Your customer would pay a fee to attend all 12 events or pay for each individual event. You could do this in-person of course, like Wednesday nights for 45 minutes, or you could use an online platform like Zoom.

In-person experiences can be an incredibly powerful way to foster authentic connections. But going online is also an excellent option for people who know they want to reach beyond their geographic location (or find themselves in the middle of a pandemic).

WORKSHOPS

Workshops are another type of event that can be an effective way to draw in new and old customers. If you’re a retail brand, let’s say a stationary store, and you know your ideal customer has a Pinterest board full of DIY projects, consider hosting monthly get-togethers to work on specific projects like wreath-making. By collaborating with a local florist you can co-host a workshop on making wreaths where both of your businesses are responsible for promoting and executing the event.

The ultimate goal of events is to foster community. When it comes to owning a local business, the more people you can connect to one another in a physical space you own or rent, the more trust you’ll build with your community.

2. Coaching & Consulting

This option is for anyone who’s been in business long enough to feel like an expert in their specific industry. 

If you’ve owned an art gallery for five years and feel confident in advising others just breaking into the scene, you could consider expanding your services to a more national audience by offering consulting opportunities for those looking to open an art gallery or create more revenue on their own.

If you are savvy in business ownership, coaching or consulting may be for you too. If you’ve spent years learning in the ins and outs of business ownership, you could make a great consultant for someone brand new or someone who wants to grow.

This is the perfect opportunity for small business veterans who don’t necessarily feel like their business model lends itself to other revenue streams but still want to diversify their income and share their knowledge with those just taking the leap into business ownership. I can’t tell you the number of consults I’ve had with other digital marketers like myself as they get started in their business or add new services to their arsenal.

3. Digital Products

Digital products are exploding with growth thanks to COVID and how easy products are to create if you can put your head down and focus.

Business owners and digital educators everywhere are offering workbooks and courses for online learning.

Don’t let imposter syndrome get you with the question... “is there really room for my products?” The answer, more often than not, is yes. I would say that almost every single business I can think of could create a digital product that could be valuable to someone and worth paying a fee to access. At love local, we create a lot of digital products (here is an example) to compliment our expertise on local business growth. Think about what types of things you’re teaching your customers and how can you package that up into a digital product to sell.

Let’s say you own a clothing boutique and your experience has turned you into a stylist of sorts. Hours of assisting customers and styling photoshoots has made you an expert in curating looks. This expertise is digital product-worthy.

You could create a workbook on seven ways to declutter your closet or an e-book that teaches other boutique owners how to style clothes for Instagram. Digital products are great because most people feel like they can afford to purchase them if they’re priced correctly. An e-book could go anywhere from $9 to $49 and people would be willing to pay that if they trusted the author and were convinced of the value inside.

I would always suggest having someone design your products for you or buy a template on Creative Market or even design it in Canva on your own. It’s important to have it designed in a way that compliments your brand and appeals to your customers.

4. Affiliates

If you’ve got a robust email list or strong social media following, you may be highly trusted in a specific industry or category. Maybe you’re a local garden shop and you don’t carry everything you love in store, so you find yourself referring customers to specific products outside of your shop when they need an item you don’t sell.

It may be time to look into affiliate marketing. Affiliate marketing is really popular for bloggers and online business owners but if you’re a natural at cultivating community and a lot of individuals trust your recommendations, you might want to consider adding a list of brands and products you refer customers to on your website.

Affiliate marketing programs are different across the board. Some of them allow anyone to sign up while others rely on a competitive application process. Let’s say you’re an affiliate for a big brand like Target. When you sign up, you would get a link that looks something like this: target.com/lovelocal. When someone clicks that link and purchases from you in a certain amount of time (could be anywhere from 1-30 days), you are given a small or sometimes large commission for that purchase. It all depends on the program you join. Affiliate marketing can be a relatively easy way to continue adding value for your customers with products and services you recommend that fit the industry you represent.

If you’re serious about affiliate marketing, I cannot say enough good things about this online course created by a blogger who generates $100k a month or more primarily with affiliate marketing. Dive in to see if it’s a good fit for you!

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5. Ecommerce

One thing I’ve seen more than anything else during the Coronavirus is brands transitioning their entire business model to ecommerce. Boutiques, bars, bakeries´╝Źit doesn’t matter.

Local business owners are attempting ecommerce, especially when individuals aren't able to physically shop in their space. However, with or without a pandemic, ecommerce is still a seriously powerful tool. Your customers may not always have the flexibility to drive to your store when they need something.

When you show what’s available on your website, you're breaking down obstacles that would prevent someone from purchasing, like being unable to visit your store. For customers who want to shop online, you could allow them to select a pick-up time that works better for them. Then you could offer Friday deliveries by hiring another company or maybe you jump in the car yourself to ship out orders. Having your products listed online gives you a greater opportunity to make a sale and offer your customers the convenience they’re seeking.

6. VIP & Exclusive Member Programs

If your business is looking to gain loyalty and recurring revenue, a VIP program may be your next best move. VIP programs or loyalty programs work with a large variety of businesses but the most effective are service based businesses and potentially some product based businesses. For one of our clients at love local, we collaborated on developing a VIP program for a MedSpa that wanted to guarantee some recurring revenue but also package up some amazing options for her loyal clients. After launching, six people immediately signed up for the $399/month option, which now gives her $2300+ in recurring monthly revenue!

A VIP program can be structured in a lot of different ways but some of the most common formats have customers enroll and pay annually, quarterly, or monthly.

Think of it as a membership or exclusive opportunity to get first dibs on something like special pricing or free shipping or anything your customer would love for a small or large fee. You will absolutely want to ensure your audience is interested in and willing to pay for a VIP program before launching. You don’t want to develop an entire program only to have a few people actually interested in it.

What I love about VIP programs is that those who enroll and experience the benefits have a lot more loyalty to your brand. And loyal customers become strong referrals. The more you can invest in your VIP’s, the better the outcome will be for both your business and your customers.

7. Creating Your Own Product

Designing your own products can be time-consuming at the outset but its cost-effective nature can make the extra effort worth it. For example, if you have a boutique and you’ve got a shelf stacked with candles you purchase from other makers, you could try making your own or white labeling if that’s something you’re interested in.

By creating your own line, you’ll likely be spending much less on the actual ingredients and packaging. You’ll be able to mark it up to a price that gives you a little more profitability. Not only does creating your own products improve your profit margins, but it also is a great way to expand your brand. You could wholesale that product to other business owners in your industry looking for a product just like yours. Here at Love Local, we created a product of our own, the Love Local Collection, to continue our mission of supporting the small business movement with printed goods

8. Direct Sales

Being a consultant for a direct sales company could be a great option for your business as well. One I see frequently is chiropractors and massage therapists using essential oils. As they use them during appointments, their customers might fall in love with a scent and want it for their own use at home, so the business owner can get one or several oils ordered for them outside of their core offering.

When you join a direct sales company, you typically have the opportunity to invest in a suite of products and then become a sales rep for that company. By selling a certain amount of products, you earn a commission of varying sizes. Who knows, maybe you’ll fall in love with the company you’re selling from and decide to grow a team, which can increase your income even more.

See what direct sales companies are out there that might complement your core offering. This has been a tremendous option for people during COVID as most of the sales happen digitally or without a physical space.

Wrap Up

Have any of these ideas inspired you in your local biz? We hope you can take one or more of these and run with them! 

As you continue to innovate, shift, and grow your local business, our team is ready to support you in the process. We’ve created a FREE training to help you create a strong foundation to build your business. From growing an email list to using social media to build a legacy brand in your community, we’ve got the tools you need to increase your revenue and impact. Check it out here!

If you’ve implemented any of these ideas, we would love to hear about it in our Facebook Group and support your local business journey!

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