For years, I’ve been a firm believer in creating multiple streams of income. While in college, I can remember trying to learn how to start a business while also getting paid by a company to take notes in class (I guess I already believed in various streams of income).
Fast forward to the present: after five years of running multiple projects at any given time, I began to question the strategy. When diversifying, it means my attention is divided among multiple projects, making it difficult to run any of them perfectly. To create multiple income streams, you will potentially have to sacrifice perfection.
But the strategy paid off for me when COVID-19 struck, as a few of my income streams plummeted to zero (even less than zero, in some cases).
If I had been reliant solely on any one of these businesses, I would be out of business and hunting for a fresh corporate job as I write this article. But instead, I have been able to run my life and businesses on various streams of income while we continue to pivot and adjust focus for what the new world throws at us.
Let’s talk more about the pros and cons I’ve learned in the last five years when it comes to generating multiple streams of income.
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The benefits of multiple streams of income
Let’s move those eggs around, shall we? You don’t have to worry about breaking them all in one basket if you choose to weave other baskets. Diversification means limiting your risk.
What about your interests? That’s another benefit. You have the ability to tackle multiple interests and get paid for it. Do you love cars and animals? Then start your own mechanic shop, walk dogs or have a pet grooming business as a side hustle.
Doing so allows you to test your interest levels to see what you really want to do. I’m 36 years old and joke that I’m still not sure what I want to do when I grow up (in full disclosure, I also think I’ll say this when I’m 70). It’s because I know that in the next five to 10 years, I may be involved in a completely different business. And that’s OK. There’s very little chance that I’ll be operating the same business in 10 years. I just have too many interests and too many things that I want to try during my lifetime.
Downsides of multiple streams of income
With multiple streams of income, your attention is scattered. You risk becoming a “Jack of all trades but a master of none.” In my opinion, there isn’t anything wrong with this, especially if you are working on projects that bring you life, joy and energy.
However, I realized that there was no way I could perfect any of my businesses due to my scattered focus.
The pandemic struck
I’m involved in a number of businesses, including a local media/events company, Airbnb rental properties, a local franchise, my personal brand, brokering real estate, and event production.
Once the pandemic hit, our event business went to zero overnight. We no longer had advertisers because they were no longer producing events. In April, every Airbnb booking that we had for our short-term rental properties canceled. We lost a good chunk of money that month and I wasn’t sure what was going to happen (it has since rebounded). We canceled our own events that we were producing due to uncertainty.
It was a scary time, as we didn’t know what was around the corner, and we began to pivot as fast as we could. We pivoted so hard our feet were hurting, but we never completely lost out. When certain income streams went to zero, others stayed steady. Because of this, I am extremely grateful to have different streams of income, but it also shed some new light on how I was operating.
I was recently accepted into a mentoring program, and while I was explaining the businesses that I was involved in, one of the mentors asked me to do an exercise and put all of the projects on a single spreadsheet.
I did so, and also labeled each with the percentage of my time that I devoted to each. I also took it upon myself to add the percentage of time that I wanted to devote to each. Seeing the projects on one single spreadsheet allowed me to see in a new light.
I had an epiphany.
I counted my employees who assist me with these businesses and realized that there was no way that I could ever grow these projects to their full potential with my current structure. They were all operating and running, but not to their potential. None of them were growing. Although it seems obvious now, this was the first time I was able to visualize the problem and understand it.
I realized I needed three to five additional people to take these projects to the next level, but I didn’t have the resources to bring those people on. So, while I was grateful to have the income sources during the pandemic, I also decided that strengthening my focus was equally important, and that’s what I’ve begun to do.
I’m selling one of my businesses at a loss, and I’ve decided to scrap another entirely. While it’s the end of these two endeavors, I’ve never been so excited about the potential that lies ahead.
I have learned some valuable lessons in the midst of COVID-19. I intend to keep building multiple streams of income as long as their processes can be streamlined or are in the same verticals as my other projects.
My conclusion is that multiple streams of income are important, and I will continue to attack multiple projects. But, I won’t take projects on unless I can put the people in place to help me sustain those businesses and take them to the next level.
I also intend to stick to my gut when looking at new opportunities. If it doesn’t align with my interests and passions, I will pass, no matter how potentially lucrative the opportunity is. Life is too short to work on projects that you don’t enjoy.
My final thought for you is this: continue to create multiple streams of income, but create them with focus and strategy in mind.
In a strange way, I have COVID-19 to thank for this lesson. I wish you luck.