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Multiple Income Streams from Your Business

Discussion in 'General Entrepreneur Discussion' started by Diane Kennedy, Dec 28, 2007.

  1. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    I work with a lot of clients who have very succesful businesses and/or practices (medical, etc) and love what they do. But, the income is all considered earned income and is taxed at the highest possible level.

    So, I'm always looking for ways to turn what they do into multiple streams of income. For example, a Dr. who is successful with his practice may prescribe (and sell) vitamins, refer to physical therapists (for a fee), write a book, give out generalized information via columns (which drives people to a website which sells informational products), and so forth.

    So, here's my question - how many people here have used this own principle in their own business? Do you look for ways to turn your business activity into a highly leveraged activity? I'd love to hear some more stories. And, if you'd like, I can show you how you can pay a whole lot less tax on the income by setting up multiple streams of income.
     
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  2. thecoach
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    thecoach Contributor

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    I'm actually just about to start adding other streams of income. I am building a practice in the insurance and investment industry and I'm just working on launching my own website. Right now I've got a facebook group with a bunch of articles on financial tips that will be moved to the new site. I've worked out a deal with the local newspaper to run "advertorials" on thier online version of the newspaper in the business section. The advertorials will be an ad that looks like an editorial. The first paragraph will be on the advertorial, if people want to finish reading they will be linked to the article on my website, where the rest of the article is and I will be promoting my services. I'm also likely going to add adsense to the website to bring in a little more cashflow. Once my business grows I'll likely write some books about something and sell them through the website as well.

    Down the road I'll be buying a couple of revenue properties. Becuase I sell insurance the tenents will likely get their house insurances through me, and I'll hit them up to meet with me about other stuff that I do as well...like creating a savings plan to buy a house down the road...maybe they buy one of the houses from me...guess who's gonna sell them the mortgage and property insurance?

    I'm also working on creating a sports DVD and books for a sport that I coach. I'll be setting up a website with all kinds of drills, tatics and techniques and have an online store with the books and DVDs that I make as well as sell other brand name stuff like equipment, etc. IT's still more or less in the brainstorming stages. I've coached for about 10 years so I might as well do something useful with the knowledge I've gained over that time, right?

    Is that the kind of stuff you're looking for?
     
  3. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Thank you! That's exactly the type of stuff I was looking for.

    I've got a couple of reasons for this thread:

    (1) I'm looking for new ideas for my business. Maybe the better question is "How can I better utilize the assets that my business already has?" Still working on that...

    (2) I'm looking for new ideas for my clients.

    (3) I think there could be some really fun ideas that come out of this thread - who knows, maybe everybody who participates could do an eBook together. 100 Ways to Leverage Your Business - that we then use as cross promotion
     
  4. kurtyordy
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    kurtyordy Bronze Contributor

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    An very easy one is to lease from yourself. I know it is not creative, but it is simple.
     
  5. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Thank you Kurt.

    So, to expand, use your business to buy real estate. You then build an asset outside of your business.

    BTW I'm serious about doing an ebook. When we get close to 100 ideas, I'll post something about an idea and see if the contributors are interested in doing something together as cross promotion.
     
  6. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    in my "old" biz - we added additional services that our target clients would need.

    Our target clients were RV-ers... so in addition to our "bread and butter" service, we offered mail forwarding, bill pay service, etc. We also referred to lenders (for the financing of RV's) - and got kick backs from the lender.

    Another "idea" we had - but never really followed up on - and now never will because we are out of that industry - was to run a contest and collect people's travel/RV stories.... and turn those stories into a book.

    In self storage - we have "add ons" people can buy locks, rent shelving for their units. etc.

    The latest project is one I'm really excited about. As we expand build additional facilities, a new opportunity is opening up to us. Once a facility is large enough (multiple locations okay) , it can quality for loans in the 5.5 to 6% range.... but many facilities in rural USA are too small to qualify for these loans - and therefore are "stuck" with local banks at rates of about 8.5 to 9.5% We can bring these facilities into our organization, get them financed at the lower rate and lease back to owners for 8% or so.... we make the spread for our trouble (in addition to the other benefits to all involved for bringing the facility into our organization)
     
  7. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    ATW, great idea!!!
     
  8. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Thanks ATW. Right now you've made me think about my biz - what else do my clients need? Great question.
     
  9. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    My guess is that you have a lot of "high income" biz owners and r.e. investors... what else do they need?

    streamlined way to pay bills, personal assistants, time saving tools (in short)
     
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  10. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    You're absolutely right. I am so focussed on other people's businesses, that I forget about my own. The wheels are really turning now. Thank you. Rep ++ ATW - I think you just made me some money.
     
  11. thecoach
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    thecoach Contributor

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    One other thing that I've done that kind of fits is I've become the "go to" guy for most of my friends and clients. It started out as finding people that offered products or services that I don't but are related to the work I do (IE lawyers to set up wills, accountants for tax questions, real estate agents, mortgage brokers, etc). Then I thought, why limit things? I've been lucky enough to meet a wide range of people from all kinds of backgrounds so anytime anyone I know needs something done, they come to me. It doesn't matter what it is. I've had people ask me if I know people that are in no way even distantly related to the work I do like hair stylists, mechanics, yard maintenance people, pet sitters, where the best party is for Halloween, etc. Every once in a while someone will ask me if I know someone and I don't know someone, but do I tell that person that? Nope, I track someone down so they think I'm that well connected.

    By doing this I'm building a wall around my business (or as Buffett would say a moat around it) becuase eventually if they need something that I offer and they don't know I offer it, they are going to ask me for it anyways...becuase I'm the guy they ask for everything they need. Not only does this create a wall around my clients but I'm referring business to people so eventually they refer business back to me as well.

    If it's a very good client or a really close friend, I'll follow up with them after I've referred them to someone asking for feedback to 'make sure I'm referring people to good businesses becuase I want to make sure my clients get as good of service from the people I refer them to, as they would from me'.
     
  12. andviv
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    andviv Gold Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    a CPA here does business deal presentations for his clients. He sets up meeting where investors come to present potential deals to the CPA firm's high income customers, and then he presents how this deal would fit in their customer's plans and what benefits could be gained. I found this interesting.
     
  13. phlgirl
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    phlgirl Bronze Contributor Read Millionaire Fastlane

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    We have not moved forward on any of these concepts; however, a few things we have discussed at our meetings, with regard to additional income streams are the following:

    • Education - helping first time RE investors navigate their first few deals
    • Property Management - taking on the management of other investors properties (same area) for a fee
    • Rent Appliances - have talked about renting washers/dryers, etc. to tenants who might have an interest
    We struggle with keeping our focus on the main venture while starting up one of these additional streams. I do think it would be smart and I know the banks would love to see the REAL income but we have yet to make the leap on any of these.
     
  14. kurtyordy
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    kurtyordy Bronze Contributor

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    ok, here are some quick brain storms-

    attorney-
    forms website/ how to vids for like wills ect/ ebooks-what most people miss when forming a partnership, you are gonna die make sure you are prepared, blood and guts-your rights when it comes to workplace injuries, prenups- insure the ball and chain does not become an anchor, etc/ this is a stretch, sell letter services- i want to right a threatening legal letter to my neighbor who let his pet camel crap on my yard, so I go to lawyers site, find stock letter for pet crapping on my yard, buy, input address, prints at lawyers office on his letter head, he signs and sends. He did not sell his service, he sold a letter, so I believe it would be passive income.

    accountant- vid on how to setup a company in quick books/ book on how to save money on anything- for some reason if it comes from an accountant people believe it more/ give away free personal tax return when the buy $400 book- wouldn't this move the income to passive?

    doctor-seperate charges on bills- shots are resales, nurses time is resale, only his actual billing time is earned. not sure what to do in practice he/she does not own.

    That is all I have for now.
     
  15. Yankees338
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    Yankees338 Bronze Contributor

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    My dad is a chiropractor and an acupuncturist, and when I work in his office, I notice a couple of things he does to utilize multiple streams of income:
    • He sells vitamins.
    • He sells pillows that provide extra back support and encourage correct posture.
    • He sells different mattresses, mainly as an affiliate, for companies like Tempur-Pedic.
    • He sells little accessories to help with pain like braces and orthodics.
    • He also refers patients who come in for treatments after an auto-accident to a couple of attorneys who specialize in that type of law. In turn, they refer their clients to him for treatment.
    • After about 20 years of practicing solely chiropractic, my dad turned to acupuncture. He went to school for three grueling years and got his certificate to practice. Now, he gets patients who come in for either acupuncture or chiropractic and sometimes both. He's only been practicing acupuncture since March, so it's still a work in progress, but it's definitely shown promise.
     
  16. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane FASTLANE INSIDER Speedway Pass Summit Attendee

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    Great for your dad! I would imagine acupuncture is probably less physically demanding than the chiropractic business would be. That may carry your dad futher for a longer time. Good luck to you both. :cheers:

    Greg
     
  17. Yankees338
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    Yankees338 Bronze Contributor

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    Thanks! Most of them just provide a quick buck here and there, but they're more geared towards pleasing his patients than actually bringing in a substantial amount of money. The acupuncture was geared more towards money, though. The thing with the acupuncture is that it requires a lot of time. He is probably with his patients for about 5 or 10 minutes, but they're in the rooms with the needles in them for about 20 or 30 minutes. It's good, though, because he can work on his chiropractic patients in the other rooms while he waits. If only all five (2 acupuncture, 3 chiro) rooms were filled at all times! :)

    P.S. I'm gonna start a thread on marketing for businesses like that. I think it could turn into an interesting topic.
     
    Last edited: Dec 29, 2007
  18. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Thank you all for your comments on this thread. There is some great stuff in here.

    If I could sum up what most of the ideas are centered around, it's "What else do my clients need/want?" Great question for every business owner to ask!
     
  19. AroundTheWorld
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    AroundTheWorld Be in the Moment Speedway Pass

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    If one wants to create multiple streams from the same "base" area, I think there are two (or maybe 3? questions to ask)

    1. What else do my clients need/want
    2. What other market could benefit from this product/service?
    3. Can I go in the other direction? There is a business term for this one, but I am drawing a blank ... so I will just explain.

    We have talked a lot about #1.

    On #2... an example would be this: My clients in my old business were RV owners - but airplane owners and yacht owners could also benefit from my service.

    #3 is expanding your business either forward or backward in the "production" line. If you are a bread baker - you could decide to mill the flour as well, or go even farther back and own the farm that grows the wheat... or you could go forward and own the store that sells the bread.

    Or.... you are in a business that serves the customer or consumer... but you have learned a great deal about how to efficiently run your business and so you may branch out to helping/working with/partnering with/train other businesses in your same industry (franchising, training, sell operating manuals, etc.)
     
  20. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Two other thoughts occurred to me:

    As you focus on your target market, there are people that maybe you don't want within the business or that aren't really your niche - you can sell those leads.

    Also, create leverage from your information - write a book about the experiences, write a blog (for marketing), if you do a seminar or talk, film it and offer it as a product for sale.
     
  21. Allthingznew
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    Allthingznew Contributor

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    If you have a B&M business buy the property and pay yourself rent. If you're in a multi-tenant space and you own it you also collect rents from tenants.

    Find a way to duplicate, franchising and mlm's are obvious examples, but not necessarily the only possibilities.

    Partner with complimentary businesses. Adding an ice cream counter in a bakery can be a simple example. Contract with vendors to supply a service you get a percentage of or rent from. Like a coffee cart in an office building.

    Help people go into business for themselves whether as an adviser, financial partner, or supply a missing skill and get a percentage of the business. Who was it who said "I'd rather earn one penny from the efforts of 100 people than one dollar from my own efforts", or something like that?

    Ideally, each income stream should be indepentant of the others. That way if something happens to one you still have the others.
     
  22. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Allthingsnew -

    I like the idea of helping others go into business as well. I think it takes a look at another asset of your business - your Intellectual Property - (ie, the way you do things) and creates a way for you to make money off of that.

    I have a client who is a master at creating chiropractic offices that require the efforts of the doctor/owner, but give much higher than normal returns. He does two things with that knowledge: (1) along with his partner, they start 1-2 new practices every year. They find an associate to come in as an employee/eventual buyer and train them in the different way to run the practice and after a couple of years, sell it to him. (2) He puts on seminars for chiros on how to run practices so they can duplicate. Interestingly enough, he always has the best success when he and his partner create the practice themselves instead of just teaching someone. I think people think they can do it better or smarter and so change the model...and the model is why it works.

    Thanks for the suggestions AllThingsNew!
     
  23. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    There are some great ideas here for doctor offices and my CPA clients.

    What about the type of businesses that others have here?

    Anybody else want to weigh in with their existing business to get some great minds brainstorming multiple streams of income?

    (I love learning from this thread)
     
  24. kurtyordy
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    kurtyordy Bronze Contributor

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    I like the idea of an ice cream counter at a Doctors office. Helps keep them sick.

    What other businesses types are you referring to?
     
  25. Diane Kennedy
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    Diane Kennedy Bronze Contributor

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    Well, for example - Russ has a B & B, Is it Yves who has the cabins? (I forgot, I'm sorry!) What other businesses are there here? What other streams of income could they have?
     

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