Everybody and their mothers talk about passive income streams on the internet. They all talk about creating multiple revenue streams too. Tutorials abound about advertising revenue, subscription models and dropship products – all of it with the goal of giving the would-be entrepreneur multiple revenue streams so they can go and backpack around Thailand or post bodybuilding memes about “taking it to the extreme” all day.
Despite all these people talking about these subjects at a constant rate, there’s something that pretty much everyone overlooks when it comes to passive income streams, multiple revenue streams and all of that online business goodness.
I am going to tell you what that one little secret thing is in this article. Before that though, let’s go over some definitions – and frank talk – about the two terms I’ve talked about above.
What Are “Passive Income” Streams?
Passive income streams are the holy grail of the online entrepreneur. From the minute you first tentatively type in “how to make money online” on your favourite search engine, you’re swarmed with turnkey businesses and great opportunities to make money without doing any work.
Now, the reality behind passive income streams is that sadly they don’t work quite like that. There’s no such thing as a free lunch.
However, the basic idea behind passive income streams are that you decouple hours worked from the amount of money you make.
You can create a product that you can sell multiple times.
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Or you could build a website and stick some adverts on it and get paid monthly for the ad placement.
Those are both what the online business guy would call “passive income streams” because whilst you have to work to make the website or product, you can earn money later without working. This is different to a job where you get paid $25 an hour and then you get nothing in the future.
(Despite what some people online say, there are benefits to working a job with a fixed salary. Don’t fall into the “Employees are slave losers” mindset.)
You might notice that what we’re really talking about with passive income streams is what’s traditionally called “an investment.” A website, product or other passive income generator is basically an asset, and the money you make from that asset is a return on your investment.
You just measure your time invested as opposed to money invested. (Or, to be more precise – it’s often both.)
Why Do You Need Multiple Revenue Streams?
Let’s define multiple revenue streams.
Most websites are not going to be massive cash generators – especially not when you first build them. Like any other investment you build or asset you buy, you’re going to put in more at the start than you get back in money. Even when you have considerable money coming in from an investment, it’s best to throw that money back into other investments (or maintaining your current investment.)
As an example, you might spend 100 hours building a website. It might make you $50 a month. After one year, you’ve earned a paltry $6 an hour for your time. After two years, you’ve earned $12 an hour despite not having put in any hours for the year. If your website is up in five years’ time, then your time is worth the equivalent of $30 an hour. Providing you keep your website working, that figure will go up and that hundred hours of work will be worth thousands to you in the long run.
But you’re not retiring on $50 a month. That’s why you need multiple revenue streams.
Multiple revenue streams do what they say on the tin. If you have one website or product making you $50 a month, you’re in trouble. When you have ten products making you $50 a month, then you probably have enough to live on. If you have a hundred assets making you $50 a month, then those multiple revenue streams combined will have you living a comfortable life.
Multiple Revenue Streams – You Don’t Need One Business For Each Product
You might have read the above section and thought, “Why would I build a hundred websites that make $50 a month?”
That’s a good question.
You don’t need to think of one asset as one revenue stream. That’s a mistake that a lot of people make. One website can have multiple products. Your dance tutorials site can sell dance DVD’s, backing tracks for music and T-shirts. Those are all different products under a single brand.
More importantly, you can think about different products with the same goal.
Not everyone wants to learn from a book or a DVD.
More importantly for the internet entrepreneur, you should look at different types of revenue stream – think beyond multiple revenue streams and into multiple types of revenue stream.
Your music site could have a subscription model as well as downloadable one-time products. It could have a one-to-one product and a live product.
Those are not only multiple revenue streams, but most of them are passive income streams and the others will command a premium. They’re essentially the same offer as well, just in different forms. The different revenue types also protect your business against unforeseen changes.
(Imagine if musicians had have gotten ahead of the curve and started promoting their own subscription/streaming models before the tech giants jumped in and made their pounds into pennies.)
Alright, So What’s The Secret Secret That Nobody Mentions About Passive Income Streams and Multiple Revenue Streams?
You can create an entirely new user base – and an entirely new system for income – just on mixing and matching different revenue types where they shouldn’t be.
Everyone knows you can run an advertising campaign on your website and make money that way. It’s saturated for that reason.
Everyone can make money on a book by publishing it to Amazon… again, there’s a lot of competition there.
However, there are very few people looking at advertising opportunities in self-publishing.
People will also avoid membership programs because they’re too complicated, but they’ll package lots of information into a $10 book.
Just think about swapping multiple revenue streams from one industry into another. You’ll find that there are better examples than the ones I’ve written above. (I don’t want to give the game away too much.)
I wrote a few weeks ago about taking one step back when you find a “good idea” and seeing how you can twist it to differentiate it.
When it comes to passive income streams and the ideas you’ll find on entrepreneur forums about multiple revenue streams, you almost have to do this step.
That said, there are tons of untapped opportunities to be had there – because nobody juggles the revenue types across industries. I imagine in corporate areas it’s even worse than small business. Media companies could take a page out of tech company bibles (as in, not go bust due to the internet), and tech companies could do worse than mimicking companies from other sectors with their revenue streams, (for instance, they could stop relying on venture capital until they hit one billion users and realise nobody is going to pay for anything.)
So take a few minutes to think about your business and see where there are opportunities for new revenue streams – and new types of revenue