5 Strategies to Find New Revenue Streams for Your Business

Most senior executives would likely agree on the need to find new revenue streams.

However, many mostly focus on scaling up sales in various channels of their existing offerings or acquiring another company to buy more growth.

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We ask a different question:

“What if you could find & grow new revenue and product opportunities organically?”‍

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Today, we'll be covering five different strategies you can employ to find new revenue streams to grow your business organically.

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1. New business models

If you look at your business right now, you're executing on a combination of variables that create your current business model:

• Customer segment
• Channels
• Problems you solve
• Value propositions you promise
• Solution offering
• Key activities, resources, partnerships
• Revenue model
• Cost model
• Etc.

Changing any one of those variables creates a new business model.

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Common ways businesses change

Moving from a service business to a product business

• Scalable growth
• Leverages market insights & relational connections

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Moving from an Original Equipment Manufacturer (OEM) to a brand

• Leverages product experience

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Moving from distributor to creating your own product

• Leverages channel

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Examples of ways business models change

Netflix

Netflix grew by continually changing their business model, going from mail-order DVD rentals to streaming digital content. Now they even produce their own films.  Like Amazon, they start with the end customer and innovate on their behalf - even if it means a new business model.  They are also working their way backward in the supply chain.  Netflix shifted from distribution to distribution + studio model, which completely changed their entire business.

Private labels

Walmart and Target created new revenue streams by leveraging its customer base and adding new private label products like Up & Up.  Like Netflix and Amazon, they started with the customer and worked their way backward in the supply chain. They went from pure distribution to distributing their own product lines within their stores.

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Questions to consider:

1. What leverage do you have in your current business for new revenue models?
2. What changes to your business model would have a big impact for you?
3. Where are you currently at risk?
4. Where are you over-invested?
5. Which direction is the market heading?
6. What would be possible if you could innovate at the speed of a startup?

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2. Leveraging your existing customers to create new offerings

Your company has many existing assets baked into your current business model that you can leverage. One of the strongest of those is likely to be your current customer base.

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Most companies get stuck in thinking,

“We understand our customers really well.”

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The truth is, they actually don’t.

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Your business is only solving a small slice of all the real challenges & decisions of your customers’ experience. This is because when you look out into the world, you are viewing things from a certain perspective - which is the inside of your company, looking out. That vantage point offers the best insight into your business, but a limited perspective into your customers’ real world.

Your business is complex. Life is complex. So also is the life of your customer. ‍

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So how do you change your vantage point? 

We suggest sending in a team to embed with and deeply understand your customers. You must dive deep into their world, their many contexts, workflows, decisions, mental models, and more. And most importantly - you need to know what to look for.

At first, it feels humbling to admit you don’t know enough about your customers. But then you realize the benefits of going deep, learning, and surfacing all the key insights that are critical to growing your business.

We do this all the time and are still amazed at how many opportunities we can discover. We inevitably find that there are so many hidden opportunities within existing customer bases - they simply need the right team to surface them and bring them to light.

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Check out our video on discovering the truth about your customers and their needs.

Learn How to Understand Your Customers

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Areas of discovery to consider:

Workflow challenges

• What other tasks are your customers trying to accomplish that may be upstream or downstream of your current offerings?
• How difficult is it for them?
• What kind of pain does this create?
• Where is the pain in their workflows?

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Emotional impact

• When are your customers feeling frustrated or uncertain?
• When do they feel anxious or worried?
• What are they worried about?
• How is this affecting their decision making?

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Lack of vision

• What are your customers doing that they shouldn’t be doing at all?
• What should they be doing that they’re not?
• Why do they believe in doing X vs. Y?
• What belief system is at play?

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Problem source

• What is the root cause of all of these problems?
• Are you fixing the right problem(s)?
• Does the root cause have a solution?
• What other problems would simply “go away” if we solved the root cause problem?

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If you can identify more significant problems your customer is facing, you can uncover potential opportunities to up-sell to them in new ways.

How might you innovate on behalf of your current customers?‍

3. Leveraging technology in business

We live in a rapidly advancing world, where new technologies are available nearly every day. These new technologies continue to re-shape business and entire industries several times over.

The great news is that these new technologies are becoming readily accessible. From satellite imagery to machine learning, sensors, ultrasonics, cloud, image detection, the opportunities seem limitless. And while the buzz words can be hype, there is real credence to many of them in the right applications.

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Questions to consider:

• Are there new & upcoming capabilities that you might not be aware of?
• How might new technologies advance your business & the needs of your customers?
• What data might you have that you’re not leveraging to its fullest potential?
• What key questions are you unable to get good answers to right now?
  

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Here’s the challenge:

Corporations struggle to leverage these new technologies.

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Most corporations are dealing with:

• Legacy systems
• Different systems that don’t integrate well
• Data errors
• Missing data
• Unreliable information
• Organizational friction
  

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Not only can these cause many problems within a company -- they also make corporations very slow to react to changes in the market and emerging opportunities.

In the startup world, almost anything is becoming possible.  Amazing things can happen when you bring together the best technologies + the best market opportunities + the best teams who can move fast.

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4. Industry innovation

One of your most vital assets is likely your knowledge of your industry - the inner workings, how it operates. 

So leverage it! That’s your moat against outsiders who might want to innovate in your space, but aren’t sure where or how to play.

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Questions to consider:

• What inefficiencies are in the value chain?
• Where are the biggest challenges?
• Who has the real influence?
• What signals trust for an innovation to be accepted?
• Where are the key decisions made in the value chain?
• What companies are not delivering the best value?
• Who is taking more than giving?  Who is causing more pain than impact?
• Who is not aligned with the interests of the end customer?
• What systems are antiquated and should be replaced?
• How should life be for the end customer?
• What roles should / shouldn’t exist?

What if you could you bring a new product or service to market that creates value in your industry, and also enhances the experience for the end customer?

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5. New markets to target new customers

Every market is different

Expanding into new markets can be a great opportunity, but comes with challenges. This is because different markets have different contexts. 

Context is everything

Just because your offerings are working in one market, that doesn't mean you can simply pick them up and drop them into a new market.

Isn’t a car, just a car?

No.

Could you sell a Chevy Suburban into the European market? Sure, it classifies as a motor vehicle, but it’s unfit for that market. Why? The driver’s seat is on the opposite side of the vehicle. They drive on a different side of the road. There’s limited visibility. It's way too big for narrow lanes and tight parking.

It’s a great vehicle in some places - but it’s not a match for that market.

Is a camera just a camera?

No.

GoPro cameras are different from mirrorless cameras with interchangeable lenses, which are different from outdoor security cameras with infrared night sensors.  Where you mount them is entirely different, lenses are entirely different. User interfaces are entirely different. Yes, they all have a camera inside - but their uses are fundamentally different in a thousand ways.

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New markets require new product designs

New markets have a new context, so have to evolve. To succeed, you’ll need first to take the time to deeply understand this new market and its customer segments.  What you’ll very likely find is that different contexts drive new product innovation.

How will you innovate on behalf of the new markets you want to enter?‍

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Benefits of diversifying revenue streams

If the history books and 2020 have taught us anything, it's that any market can become an unpredictable place. Adding new product revenue streams to your business can help you achieve:

• Increased growth
• A high-margin, future business model
• Revenue diversification & improved financial stability
• Increased marketability if you want to sell your business
• Continued leadership in your industry
• New data and insights

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By finding & creating revenue streams, you can build more confidence in the future growth of your business.

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Want to discover how you can create new revenue streams for your startup?

Schedule a free consultation to see how Headway can help you identify the best opportunities to expand your business.

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