TCFBO #003: Digging for Gold

Read Time: 2.5 minutes

Over time businesses grow and businesses decline.

Even if the business remains static and we simply do the same thing day after day, week after week, year after year, the world around us is continually changing.

So what can we do about it?

We’re all familiar with business sectors that have changed considerably and businesses, which once seemed secure, that have fallen by the wayside.

Video rental has been replaced by streaming services.

High street retailers are being replaced by online stores.

Traditional hotels are having to compete with Air BnB properties.

The driving industry faces a future full of driverless vehicles.

And a whole host of service sector businesses are coming to terms with the implications of artificial intelligence (AI).

We can look at this growth and decline as a simple bell curve.

And this growth and decline applies not just to the overall business but also to individual income streams (or revenue streams) within the business.

Some income streams will grow more than others.

Some will grow faster than others.

Some will be more profitable than others.

But eventually, all income streams will go into decline.

So as business owners we need to be thinking ahead during the growth phase, and not simply waiting for the decline phase before reacting and attempting to cover lost ground.

To start with, we need to take a good look at each of our existing income streams and ask ourselves:

“Is this income stream growing, static or in decline?”

“What are the possible threats to this income stream?”

“How long do we think this income stream will last?”

If we discover an income stream is in decline, then we can ask:

“What can we do to revive this income stream?”

“Is it time to divert our resources (our time, energy and money) from this income stream into growing another income stream?”

Now ideally, we want to have other potential income streams lined up ready to implement before our existing income streams are anywhere near going into decline.

Think of it like this.

Imagine that you’re a gold miner and each of your existing income streams is a seam of gold that you’re already mining.

At some point those seams are going to dry up.

So well before that point you’re going to want to go around and dig some exploratory holes, sift some dirt and look for gold flakes so you can start mining other areas.

And then when you find an area that looks like it has potential, you’re going to want to allocate some (not all) of your resources to developing a new mine whilst you continue to mine your existing seam.

Plus, you’re going to want to continue digging exploratory holes in other areas.

So how much of your existing resources are you currently investing digging for gold in new areas?

If we think about it in terms of the 80/20 rule, are you investing 20% of your resources digging exploratory holes and developing a new mine?

Are you investing 20% of your marketing budget testing new marketing channels?

Are you investing 20% of your energy building new relationships?

Are you investing 20% of your time developing new products?

If not, what could you do this week to get started?

You can also apply this thinking outside your business and start mining for additional income streams in your household too.

Recently, we added an additional income stream to our household by hosting foreign students in our home via an agency.

Not only does this bring in additional income, it also ties in with what we want from our life which includes our home educated daughter having social interaction with children from different cultures, hosting people in our home, and using minimal resources (time, energy and money) to implement.

If you do take the time to dig, develop and mine, over time you’ll end up with a stack of income streams and as one income stream declines you’ll have others that are growing and ready to replace it.

Let us know how you get on and we’ll see you next week.

Paul & Philly

Whenever you’re ready, there are two ways we can help you:

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