“Nature diversifies and imitates; art imitates and diversifies.” ~ Blaise Pascal
When it comes to investments, a key strategy for reducing risk and encouraging profit is to diversify.
Makes sense, right?
Then why do many home-based businesses have their entire business model built on trading their time for money?
The mistake comes from not diversifying your business model, and only relying on one thing to generate profit.
I’ve made this mistake myself, and it can be a costly lesson to learn.
Time for Money – Eventually You Run Out of Time
A good portion of work-from-home folks end up falling into the broad category of freelancer, contractor, or consultant. The focus becomes the work, rather than the business — which is often a good way to distinguish the entrepreneur from the worker-for-hire.
The problem lies in the fact that there is only so much time to go around. You’re going to hit a point when there’s no more of your time to trade for cash. Plus you may want to have time for other things, like sleeping and seeing your family on occasion.
So you need to diversify your business model. Pinpoint clearly what people are paying you for, then find a way to package and sell that:
- Expertise can become books, audio programs, or multimedia products,
- Talents can be taught in a group setting (online or off), bringing larger profits for the same amount of time,
- Creative skills can be used to develop products that can be reproduced, and sold over and over, from a single work.
These are just the basic, most common ways to diversify your business. As you brainstorm based on your own unique experience and approach, I’m sure you can come up with tons of opportunities to branch out.
Look for supplemental offerings that tie back to your core business, creating separate but harmonious products or services.
A diverse business model, like a diverse portfolio, will help you sleep better at night. And if done right, it’ll make you money while you’re doing that sleeping.
Great post Tony!
Since I do web development, it was only natural for me to offer a hosting package for my clients. The amount is charged yearly at a fixed rate and offers many advantages for them (i.e: not worrying about technical details). It basically generates money for me without having to do much work.
I like your idea of packaging expertise, skill and talent.
Does this mean you’re in the process of writing a book? 😉
So true! We were just talking about that… there is only so much time in the day and not only do you limit your income by not diversifying, you limit the amount you are able to impact your clients and the community you serve.
The question we recently asked ourselves was… how can we positively impact exponentially more people without spending exponentially more time?!? I suppose that it is this type of thinking is as you mention, what sets the entrepreneur apart from the freelancer/work for hire small business owner.
Alex – Great example. And no, not a book, but something better. Stay tuned 🙂
Christine – “…how can we positively impact exponentially more people without spending exponentially more time…” That’s a terrific question. Knowing your value, and finding ways to grow that without giving away more of your time, is essential.
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