Side Businesses: Why you need multiple income streams

Posted August 10th, 2009 by admin and filed in business, income streams
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On the get rich slowly blog, there was an excellent post about the benefit of side businesses, and why you should start one, even if you don’t think you need it. I’ve pretty much always believed in developing alternate streams of income to my main income source since I was in grad school and started getting published. While the income from my reading has never been enough to live off of, it has provided a small stream of income, which has been helpful on different occasions.

As I’ve moved into self-employment, I’ve continued to explore multiple methods of generating income. This has included offering freelance editing and writing, becoming a vendor of Sendout Cards, writing professionally, workshops and professional speaking, and of course coaching. I’m even exploring some blog monetization options. All of these ventures are linked to each other, in terms of what I can offer someone, but they also provide income from different sources, ranging from college students to business owners, and anything in-between.

Having multiple streams of income has always seemed like a sensible idea to me. It means I haven’t put all my eggs into one basket, and it also means I have some versatility to my means of bringing in income, ranging from services I offer to residual income.

In an economy like this, but even in a better one, it’s always useful to have multiple income streams. The potential security those income streams can provide can be very helpful, and even if you don’t need the income at the time, it can also be nice to have a surplus income that you can use for luxuries or to save for that rainy day which might occur.

The other benefit of having multiple streams of income is that it keeps you consistently occupied with ventures that you ideally enjoy being involved in. While its true that many people enjoy their jobs, it’s also true many people don’t enjoy their jobs. Developing and sustaining alternate income streams can eventually help a person move out of a corporate setting and into a self-employed setting that s/he enjoys. And for those people who do enjoy their jobs, having alternate streams of income can still be useful for providing extra financial padding to your lifestyle.

An alternate stream of income can be easy to develop without involving a full time commitment. It can be as simple as taking a hobby you already do, and monetizing that hobby. For example, if you’re a crafts and arts person, take what you make and start vending at a local market. Or you can get involved in an affiliate program with a product you believe in and want to endorse (I did this with Sendout cards, because I liked the idea of sending cards as a way of reaching out to family, friends, and business clients). No matter what you do, its always possible to turn it into into an income stream. Do some research to determine who your market is and start reaching out and creating relationships with that market to introduce your service or product to them.

What are your thoughts about multiple streams of income? Please comment and share.

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  • I guess this has been something on my mind for some time, since my self-employment often comes from more than one place. The crochet hat business I started in 1997 has been part-time money ever since it started, and though it is only a small percentage of my income, it is worthy to continue because it provides a creative outlet for me, and a hard-to-find service for the sort of client that would purchase hats from me. I had considered growing this business, and upon investigating the possibilities, too much compromise was needed to bring about the same result for the purchasing customer. Contracting ready-made hats overseas never felt right, as that was not why my small handful of lifestyle customers would buy from me. After evaluation, I hope this 12-year old side-business continues to stay part-time.

    The newer endeavor for me is becoming an Author. During most of the last decade, I made most of my money from my abilities in Astrology, Tarot, and Dowsing. I wanted more of a healing emphasis to my work, so I also added Reiki II, Flower Essences, and became a Master Herbalist. So my occupation is changing from Astrologer who does all these other things, to Author that does many things, and then I can include other areas of knowledge I have gained and share information as well as provide consulting when needed. This would still produce multiple streams - through book sales, paid articles, as well as product and consulting services. As you mention, a blog that gains enough readers can also consider advertising income.

    To also be considered is not just what you earn, but what you keep. Working at home, or at least in a non-formal, casual environment provides incredible savings in gasoline, car repair, eating out, clothing (including hosiery) and its maintenance - and those surprise things at the office that seem to require monetary donation toward (as an example) someone's birthday present, which gets cumbersome if your office is big. Investing in taking care of my health naturally has enabled me confidence to treat nearly anything, alleviating the need for medical insurance (which I understand doesn't cover very much anyway compared to how expensive it is) and what would have been the premiums could go better toward building a good herbal pantry (and this is accomplished in about a month or two with money leftover). And how can we forget tax write-offs for business expenses that you wouldn't be able to claim if you were an employee? Every time I drive somewhere, it is almost always for business, and at 30 cents a mile, this is an awesome write-off, and if eating out can be met with business folks, you can write that off too. These things can add up, and money kept is money earned.
  • The one thing to be careful of is to make sure you bring in enough income that the IRS keeps your business classified as a business as opposed to a hobby. There's different tax classifications and you want to stay classified as a business so you can take those deductions.
  • That is NOT hard to do hehe! Enough according to the IRS last I checked was $600. As long as you don't claim a loss after 3 years, you can break even with your business, and if everything makes sense, they won't ever have a desire to audit you. However, one of the things I do not do is write off my telephone, computer, and home-space for my office (and thereby take percentages of all the utility bills and such) - that is asking for an audit. I just write off the undeniable expenses and I have enough of those to make it worth my while! Thanks Taylor! :-)
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