Diversification Can Help You Build Your Financial Future
You've evolved from a business owner to a leader in your industry who is starting to diversify your revenue streams outside your main source. It's time to start thinking beyond transactions and creating a diverse portfolio of revenue streams at Level 7 of the 8 Levels of Performance.
At this stage, you'll build a group of consultants, establish significant alliances, start to find new revenue streams, and position yourself as a senior leader who manages a variety of projects outside of your daily responsibilities.
Let's explore what it means to increase your income and how to create a company that manages several companies and is built to succeed in any setting.
Expanding Revenue: What Is It?
To build stability across your portfolio, "expanding revenue" simply means using your current revenue source to create multiple revenue streams that operate independently and produce their own profits. This isn't about overcommitting or taking on additional work. Finding methods to generate a variety of revenue streams that complement your company's objectives and lessen dependency on any one source is more important.
When you reach Level 7, you see your company as a group of revenue streams that combine to form a stronger whole. A coach may guide you through this transition by providing a broad perspective and demonstrating how each new source of income can complement your current business plan without adding needless complexities.
The Significance Of Diversification In The Real Estate Industry
The secret to surviving market fluctuations is diversification, which also serves to solidify your legacy and long-term prosperity. You can reduce your company's susceptibility to market swings by establishing a diverse portfolio of revenue sources.
Imagine, for instance, that 20% of your income was derived from rental properties, 10% from property management, and the remaining portion from conventional sales as well as companies such as mortgage and title firms. You can continue to make money from other sources even if the sales market slows down, so you can continue operating until the market recovers.
Working with a coach can be really beneficial in this situation. To ensure that each new stream adds to your overall stability rather than spreading you too thin, a coach with experience in business growth may assist you in determining the optimal diversification tactics for your market and business style.
Putting Together A Consulting Team
It takes more specialist knowledge and management to create new revenue channels than you can handle on your own.
For instance, you must comprehend financial analysis, property management, and tenant legislation if you want to invest in rental homes. Additionally, you must have a thorough awareness of all of your financial matters and know how much money you should be investing in each area.
To help you in every way, you must assemble a group of experts and consultants. Napoleon Hill illustrates in Think & Grow Rich how Henry Ford had a row of electric buttons he could press to call out the ideal expert for any given circumstance, negating the need for him to fill his head with broad knowledge about everything. You can now take the same action.
You should consider hiring the following consultants:
A tax advisor
Advisor for wealth
Business lawyer (at least one you can trust)
A coach who will walk you through the process of creating new revenue streams
A network of company executives on a similar level who can guide you and assist you create crucial connections
To ensure you know what you're getting into and can concentrate entirely on increasing earnings, a coach in particular will assist you in identifying new business ideas, evaluating business values, and performing a cost-benefit analysis.
The network of elite business leaders that Tom Ferry coaches brings together for transformative Masterminds and joint ventures is one of the main advantages of his coaching.
How To Make Your Portfolio More Diverse?
Finding particular revenue streams that play to your skills and enhance your main business is what income diversification is all about, not trying to do everything. To create a business or invest in one that makes money without requiring a lot of daily upkeep on your side, you must make the most of your existing reputation and expertise.
If you're attempting to do it alone, adding a new source of income can be intimidating. A coach can help in the situation. A coach can assist you in determining which chances, taking into account your market, resources, and long-term objectives, make the most sense for you both personally and professionally. By concentrating on a small number of important revenue sources for a well diversified portfolio, they will assist you in avoiding taking on too much.
Examples Of Revenue Streams
While some revenue streams, such as mortgage services, are a clear choice, not all business owners can benefit from them. Here are few instances:
Mortgage, title, and other services associated with your primary brokerage are examples of traditional ancillary services.
Rental Income: To ensure a consistent monthly cash flow, buy investment properties and generate rental income.
Commercial real estate investments: For possibly higher returns, put money into bigger projects.
Consulting or coaching: You can use your expertise to mentor more junior agents, boosting your portfolio with coaching revenue.
Property management services: Taking care of other investors' properties can generate consistent, recurrent revenue.
Team Commission Splits: Hire agents to represent your company and get a cut of their sales.
Referral Income: Establish connections with agents in other areas to receive payment for referring clients to them.
Developing or flipping properties: Putting money into small development projects or property flips can yield larger, one-time rewards.
OR ANY OTHER COMPANY
A few of our coaching customers have made investments in IT firms, vineyards, and other types of enterprises.
It's crucial to pick pursuits that complement your objectives and strong points. Here's where having a solid real estate business plan is essential.
A Business Strategy For Various Revenue Sources
Spend some time completing our sophisticated business plan template, which includes information on every source of revenue, customer acquisition tactics, financial forecasts, and the systems required to ensure a smooth operation. To ensure that every revenue stream is operating as planned, thorough planning and frequent assessment are necessary; this is not a "set it and forget it" strategy.
To make sure your new source of income can generate steady income without requiring a lot of daily effort on your side, you will need to collaborate closely with your coach during the business planning phase.
The Goal Of Level 7 Is To Multiply Everything
Although reaching Level 7 is a significant accomplishment, a new chapter has begun.
Although you were already wealthy, you are now learning how to build money at a higher level that will last long after you have completely retired. You can't do this by yourself. Making arrangements to leave the company and retire with generational wealth is the final step in the eight levels of performance. For that, you must be ready.
Having a coach is crucial for managing the specifics as well as the larger picture. At this point, you will be collaborating with a premier coach who has assisted numerous other elite business executives in achieving the same results.