Multiple Revenue Streams Will Kill Your Business

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1:02Everyone tells you the rich have seven income streams. So you start seven things. You spread yourself thin, you go broke, you know the story. Here's what they didn't tell you. Every one of those extra streams of income came after they got their first stream of income to at least a million dollars in revenue. Focus. Focus first on your first revenue stream. My rule is one problem, one offer to one million. That's what you need to do. Get to a million dollars in revenue before you launch your next revenue stream. Today, I'm going to show you exactly why multiple revenue streams too early will quietly kill your business.

1:42And the hidden tax that nobody's telling you. Let's go.

1:50Welcome back to the$100 MBA show. I'm your host, Omar Zinhome, where I deliver practical business lessons three times a week, Monday, Wednesday, and Friday, to help you start, grow, and scale your business. Hey, if this show has helped you in any way, it would be amazing if you dropped us a quick review on whatever app you're using right now to listen to this podcast. It helps me and my team bring you new episodes every week, and more importantly, more entrepreneurs will be able to discover the podcast so you can help someone else start their journey. Before I go any further, let me be crystal clear about what I'm not saying to you today, okay?

2:27I ran two businesses for a decade, Webinar Ninja and this podcast. Some are already kind of saying or even typing in the comments, but Omar, you did the opposite. First of all, those are two separate businesses. And I'm talking about multiple revenue streams and offers in one business. The other thing I have to say is that the podcast was already making a million dollars in revenue before we went all in on Webinar Ninja. So I'm not saying never build more than one thing. What I am saying is don't stack multiple offers inside one business before that business has proven itself, before you have a winner behind your business.

3:04Let's talk about why. I've been around a lot of entrepreneurs in the last 20 years. Beginners, seasoned entrepreneurs, millionaires, billionaires, you name it. And people that think multiple revenue streams makes them smart, makes them savvy, makes them sophisticated, makes them some sort of serial entrepreneur, right? Real buzzword you'll hear a lot of. I'm hedging my bets by having diversified my revenue streams. I'm not putting all my eggs in one basket. This is what you'll hear a lot in the business circles. It sounds wise, right? And the language also sounds like you're being cautious and you're being responsible.

3:39But at the start of your business, it's not smart. Diversification is a strategy for protecting wealth that you've already built. But if you have nothing, you are not protecting anything. Diversification is not a strategy for building in the first place. When you have nothing yet, spreading yourself thin doesn't reduce risk. It guarantees that you'll be mediocre at many things because you're not focusing your resources, your time, your energy, your effort, your team into one thing. You don't diversify your way to being successful at what you do, especially at the start. Your focus is what you need.

4:16You need to focus on being great at one thing, at delivering a solution to a problem to your customers. Now, you already heard me say the word focus a million times already on other shows and a few times already on this episode, but it's really a superpower. And the truth is that every wildly successful business that we all know came from hyper focus. Okay, I'm going to give you an example. Meta, like Facebook, when they started. For years, we're talking about five, six, seven, eight years, they had one revenue stream, ads. That's it. And that's all they did. They focused on how can we make the most money possible and become the most visited website possible so people can see the ads that we're selling.

4:56Let's talk about something that's fairly new, OpenAI and Claude, these companies that are selling AI services to you, right? They don't have multiple revenue streams. They have a monthly subscription for higher tiers. That's it. It's simple, right? That's how you pay for that kind of service, right? You might be able to pay for credits, but basically it's just one revenue stream using this chatbot. I have a new local cafe down the street from me and it only offers coffee. No food, no croissants, no muffins, just coffee. And they do it exceptionally well. They have a huge line out the door because what they do, coffee, they do it very well.

5:34I'm encouraging you to choose to master one thing before you build anything else. Make sure you have a winner on your hands. Make sure you have a winning offer that your customers are hungry for that gets you to at least a million dollars in revenue. Focus isn't a limitation. It's a real weapon because here's what happens when you do this. But more importantly, here's who you're competing against. Let's say, for example, your business has three offers and you are trying to make sure that you're serving all three offers, all three products, all three different types of customers. You are competing against other companies, let's just say there are three other companies that are just focusing on one offer, one of each of your offers.

6:18They're competing with you with each of your offers. That's all they do. So they have all their energy, all their time, all their effort, all their marketing, all their resources going after that one customer while you're trying to go after three different kinds of customers and three different kinds of offers to maintain and three kinds of other stuff. This is what I call the hidden tax of every revenue stream. There are things that you're to have to pay for that you do not see just by having more than one offer. Think about the last time you called a business and nobody picked up. What did you do?

6:48You called the next one, the next business. Well, guess what? Your customers do the exact same thing. That's why today's episode is brought to you by Quo, spelled Q-U-O, the business phone system built so you never miss a call. With Quo, all your calls, texts, and voicemails live in one place so anyone on your team can pick up a conversation, see the full history, and respond fast. You can set up in minutes on any device, keeping your existing number, and add teammates as you grow. No IT, no hassle. Plus, Quo's optional built-in AI agent handles after-hour calls, answers questions, and even books appointments so you never miss a lead even when your team is offline.

7:28I'm going to tell you, just from experience, the lowest effort activity that you could do in your business with the highest impact is improving your customer support and your service. And Quo does exactly that. Money's on the line. Always say hello with Quo. Try Quo for free, plus get 20 % off your first six months when you go to Quo.com slash MBA. That's Quo.com slash MBA. I've helped literally thousands of entrepreneurs grow their business. And the one thing I've seen that separates the successful ones and the unsuccessful ones is the skill of delegation. Those who can delegate grow. That's why I'm happy to have Upwork as today's sponsor.

8:09When I was scaling my software company, Webinar Ninja, I used Upwork. It's where I found highly skilled freelance professionals. My first hire was a part-time CTO. This person helped me build my whole tech team. When I was starting, I couldn't afford a full-time CTO, so I got just enough help to keep me growing. At Upwork, you can browse profiles, review past work, and get help scoping the role so you can hire with confidence and get started quickly. And with Business Plus, you can access the top 1 % of talent on Upwork. With over 170 ,000 freelancers holding five-star ratings, you can hire with the confidence that comes from hiring someone with a verified track record.

8:51It's free to sign up, and posting a job is so easy. Do what I did over 12 years ago and what I continue to do. Visit Upwork.com right now and post your job for free. That's Upwork.com to connect with top talent ready to help your business grow. That's U-P-W-O-R-K.com, Upwork.com. Here's a truth that most of us forget. Your attention is finite. Every new offer, every new revenue stream that you build splits your attention. You're not able to improve your product the same way if you just had one product, okay? Making it genuinely great, really just waking up every morning saying, like, how can I make this product better?

9:32How can I make my offer better? How can I make this easier to buy? How can I make sure my customers are getting the most value from this one thing? When you split your energy and your attention against two, four, six different offers, it's very hard for each of those to really win. And there's also an operational tax you're going to have to pay for every time you create a new revenue stream. There's more to manage. There's more manpower that's needed. There is more costs involved, services, servers, tools you're going to need, more overhead. Every stream needs its own system. It needs its own support.

10:05It needs its own marketing. It needs its own maintenance. They're really hard to just kind of set and forget. They're just going to die a slow death if you do that. You have to just continue to feed that beast, that stream, as you are going along and you don't have infinite resources. Listen, I've tried this and I struggled with this a lot in my life and in my business. And what I found is that two mediocre offers cost you more than running one great, awesome offer that earns you a whole lot more in profit. The other thing is that every time you open up a new revenue stream, the problems I just listed compound.

10:39It becomes more of a problem. It slows you down even more. You have less resources versus the opposite. When you're just focusing on one thing, your focus multiplies all your efforts. It allows you to really move quickly and progress a lot faster. I hope today's episode has been eye-opening so far, but I want to make sure you subscribe to the show because we have an upcoming episode I don't want you to miss. It's called Why Most Podcasts Never Make Money. I've been running this podcast for 12 years. We're celebrating 12 years on August 14th. So I know the business of podcasting and I know what the numbers tell me.

11:15I know that less than 1 % of podcasts actually make any money on sponsorships. We're gonna go deep on why you should start a podcast, what are other ways you can monetize outside of sponsorship, and if it's worth your time and effort if you're willing to make that commitment. Make sure you subscribe so you don't miss it. So I wanna talk a little bit about why I say $1 million should be the threshold before you move on to a new revenue stream. A lot of people think it's about the money. It's actually not about the money. It's about proving that you have traction, that you have product market fit, that your product now is good enough and it's proving itself in the market where other customers are going to enjoy it enough to tell other people and market your product for you.

11:57When somebody tells me that their business has crossed a million dollars in revenue, it tells me a bunch of things. It tells me that they have a validated product that people genuinely want because that's not an easy milestone to hit. They have real systems that they've built so that it enables them to run this business. They have a team or they have the profit to build the team. They have customers that are happy to be marketed to and are liking what you're marketing. At that point, the machine is kind of working for itself in a lot of ways, and it's not going to require 100 % of your attention.

12:29You could start to dedicate 20 % of your attention into something new. Now, I do have to say something that a million dollars in revenue is a milestone for product market fit and that you have a product or an offer that people want, but it doesn't mean that you're financially free because I don't know what your profit is. Okay. I don't know how much your expenses are and how much money you're keeping at out of that million dollars in revenue. This is why it's so important to have a P &L sheet, a profit and loss sheet to know if you are making the right amount of profit so that you can reinvest in the current business and reinvest or invest into your new revenue stream.

13:03And of course you have enough to live, But if you're not there yet, like I said before, one problem, focus on one problem to solve for your customers. And that solution is called an offer. You're making an offer. Hey, I can solve this problem by XYZ, whether it's a tool, a software, a service, a course, a coaching program, whatever it might be. So one problem, one offer to one million. That's your goal. By having that focus, it's going to allow you to just wake up in the morning and say, this is all I got to do. There's no distractions here. There's no shiny objects. You got to go back to this rule.

13:34one problem, one offer, 1 million. Let's get into the details. So I want to get precise about what is a revenue stream, what's not a revenue stream, okay? So upsells, downsells, these are not separate revenue streams. These are ways for you to make your offer more appealing, okay? So if you have an offer and then you have an upsell after the offer, like I'm going to give you some templates to go along with this course, then that is fine. That's not a revenue stream. That's just a way to supplement your current offer or a downsell, which is like, hey, they don't buy the main offer, but you have like a short version or a smaller version of your bigger offer for a lower price.

14:11In this umbrella is also like premium tiers, add-ons, these types of things. At the end of the day, what I'm talking about is solving one problem with a solution. Now, that solution might be broken up into parts so that you can be able to help them in some way and break up the value, which is called like making sure that you're giving people what they want and they're only paying for what they need, you know, by doing, breaking it up into tiers or breaking it up into, you know, add-ons, things like that, that's totally fine. What I'm talking about here is selling a completely different solution for a different problem for a different type of customer.

14:46And the test to know if this is a new revenue stream or not, just ask yourself, does this make that one thing that I'm focusing on better, deeper, easier? Then that's not really a new revenue stream that's just a supplemental add-on or product or offer inside of the main offer, right? It's sort of like a tier. Or is it a separate thing altogether pulling me away or pulling me into a new direction to solve a different kind of problem? I want to tie this up for you so it's so simple for you to remember. Number one, multiple revenue streams often sound smart, but diversification is often a distraction when you're getting started.

15:25Remember, one problem, one offer, one million. That's the goal. Understand that even when you hit that million, you have the choice not to diversify. You can just double down on that offer, double down on what's working and can continue to grow that product and your customer base, right? Why? Because every new revenue stream has a tax. More attention is going to be needed on that revenue stream. Money, manpower, overhead, you name it, right? You get the point. It's like building another smaller business in your business. Remember, upsells, downsells, they don't count add-ons, they don't count.

15:57If you're solving the same problem, that's fine for the same type of customer. When you are ready, meaning you've hit that million dollar revenue and beyond, and you want to diversify to protect your wealth, that's fine. And you can start to do that. I also want to add that a lot of people forget the fact that the whole point of running a profitable business is that you make money, okay? And you can let money work for you. You don't necessarily need to take that profit from your business and build a new offer or build a new product or build a new revenue stream in your business or a new business.

16:31A lot of people are just like, this is what I know, a business. No, you could put it into a Vanguard fund and get 10 % from the S &P 500. You could take a dividend and diversify that way. It doesn't have to be another business or another revenue stream. You could buy a piece of real estate. There are many ways. This is not financial advice, but I'm saying to you that don't lock yourself in and say, okay, I hit that million. I now have to come up with some brilliant idea for another revenue stream. No, you are in a very comfortable spot now where you can start to take that wealth and allow that money work for you.

17:02I hope today's episode helped you rethink revenue streams. If you want to continue learning, there's an episode that we recently published called How to Choose Which Business to Start. If you're new to the game and you're like, I don't know if I should do a service. I don't know if the idea I have is a good idea. How do I leverage my current experiences? All that is in that episode. So make sure you scroll back on whatever app you're using, whether it's Spotify or Apple or YouTube or whatever it might be. That episode is killer. How to choose which business to start. Go ahead and check it out.

17:33If you found today's episode helpful and you want more practical business lessons to help start, grow, and scale your business, subscribe to the podcast. All you gotta do is hit subscribe or follow on your favorite podcast app, the one that you're using right now. By hitting subscribe, you get our next episode automatically. It's absolutely free and it's a way for you to commit to growing your business. I'll check you in the next episode.

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