Most well-known entrepreneurial ventures are for-profit or commercial purposes, however some launch a nonprofit venture known as social entrepreneurs whose purpose is to solve societal problems rather than make money. Entrepreneurs who work solely for profit focus on rewards and expect a high yield though, it is impossible to define an average time to profitability. Startups tend to use a different way to measure profitability.
Overall, entrepreneurs use different ways to make money focusing on one core business, multiple side businesses, and being involved in different programs introducing multiple products and services.
If we take an example of multinational firms, they have diverse products under one umbrella. They do not stick to one means of making money. Although the majority start with one single product or service, with time they either start a product line or enter into a different market. For example, Apple’s first product was the Apple I (an assembled circuit board), however, Apple now sells iPhones, iPads, Macs, Watches, and Apple TVs to earn money. Its revenue is not limited to one product.
Similarly, plenty of companies and firms around the world use multiple sources to earn money. A few of these companies are Google, Facebook, Protector Gamble, Nestle, Amazon, Alibaba, and many others. Entrepreneurs with a variety of goods and services include Gary Vee, Elon Musk, and Steve Jobs, among others. Elon Musk invests in every business where he sees potential growth. He recently bought out Twitter.
Multiple Streams of Income
There is an ongoing debate about multiple streams of income. It almost feels like a presidential debate, yet both sides are quite convincing. Some believe all focus must be on a single business, whereas others say it’s worth working on multiple-source of incomes. So who’s right?
Andrew Carnegie, one of the richest men ever lived said,
“And here is the prime condition of success, the great secret: concentrate your energy, thought, and capital exclusively upon the business in which you are engaged.’’ He also said, ‘’ Put all your eggs in one basket and take care of it. ‘’
Meanwhile, Warren Buffet, CEO of Berkshire Hathaway says,
‘’Never depend on a single income. Invest to create a second source.’’
Both of the views are justifiable depending on circumstances. The problem with a massive stream of income is that it takes a tremendous amount of energy, effort, and time to set up a single business. It is not possible to focus on all businesses at one time. It’s like shiny object syndrome, where you focus on the new and trendy idea and then drop it as soon as something newer comes out. It is one of the reasons that starters must focus on a single business until they get success and become rich. Once they are rich, they can diversify their businesses.
Multiple-stream of income can be a horrible experience if you are a beginner. However, it can be a huge success for rich people who have an army of employees to handle everything. Historically, rich people always have multiple sources of earnings. Now you might be wondering if you should have multiple streams of income. Let’s find out together.
Should you have multiple streams of income?
As an entrepreneur, you must be asking yourself if you can manage multiple sources of income. Earning money is the basic right of every single human. The decision of having multiple businesses or sources of income must be solely taken by you. However, do not make a blind decision based on imagination and illusions. It is not easy to manage a business or handle multiple sources at one time.
If you are a starter, it is advised to fully focus on one source, and put all your efforts, energy, and time to make it a success. Otherwise, you will be lost in the path. Beginners generally do not have enough resources to manage the business. As a starter entrepreneur, you manage everything from production to marketing, advertising, finances, and accounting. However, in rare cases, if you are rich enough you can hire people to do all the tasks for you. You can start multiple businesses, and hire people to manage for you.
Now let’s get back to where and when entrepreneurs make money.
Where Do Entrepreneurs Make Money?
When it comes to entrepreneurs making money, timing is very important. Entrepreneurial ventures go through different phases in their growth and development. During these phases, entrepreneurs observe, critically evaluate, and manage the venture to be able to fulfill financial requirements, and also sustain their business. Following are the phases of an entrepreneurial venture;
Pain Period
It is the initial stages of the business where the entrepreneur initiates investment. All the activities are performed including market research, prototype building, product idea development, customer identification, market identification, and feasibility study. The activities are not limited but these are the most commonly involved.
Introduction Period
Product introduction includes activities that lead to the application of the idea in the real world. It secures patents and builds channels and distribution plans to bring the final product to the market. There is no making money involved in this phase.
The profit Period
Finally, a profit-making period where the entrepreneur puts the product on the market for sale with copyrights. Then starts to generate revenue from the goods and services. However, the amount of profit varies from business to business.
The Sunset Period
The sunset period is when an entrepreneur completely closes the business either sells it or continues to develop new variants. However, profits vary during this period depending on the success of the business.
Ways of making money
Mainly, there are three ways to earn money that includes;
Trading time for money
Trading time for money is a method that is promoted by the education system. In this, a person works for another person in a firm, or organization and gives time. In return for his time and service, he gets the money. It is a typical way of earning money, and most people around the world work for others to earn money.
Trading money for money
Trading money for money means you are investing. Though investing can be risky, many people invest in new and innovative ideas, or popular trending businesses to earn money. They also help other people create a business helping them financially. Investors often look for entrepreneurs who have credible, reliable, and competitive ideas to invest in.
Trading experience for the money
This is the strategy of an entrepreneurial mindset, where they trade their experience and earn money. In this people share their knowledge, and skills, and help others get money for their services. Hence people use their intellectual property to make money.
Meanwhile, new ways of making money have risen all over the world with the proliferation of technology. The Digital revolution has brought new ways of earning money, and some people make millions while sleeping.
Few of the most common ways entrepreneurs make their money includes;
Arbitrage
Arbitrage is when someone hires a middle man for the job. In other words, entrepreneurs work as an agency. Let’s suppose you are a graphic designer, and you get work from a company and hire someone else to do the job and pay them. This is how entrepreneurs earn money. Let’s take another example, content writing. Many people do not personally write, rather they hire many writers, and get work from another company, and the writers do all the job and get paid.
Writing a book
Writing a book is common among successful entrepreneurs or people who share their skills and experience and earn money through knowledge sharing. These books are available for offline as well as online sales. Let’s take the example of Gary Vaynerchuk who is a best-selling author of five business books. Similarly, plenty of entrepreneurs write books besides businesses and startups to earn money.
Investing in stocks
Besides running their businesses, entrepreneurs often invest in stocks and raise money. The Internet has made it easier to collect information about the stock market and to make investments. Smart people make one-time investments and diversify their income.
Influencers/blogging
Often, influential entrepreneurs start blogging or Vlogging to influence their followers. These entrepreneurs earn huge amounts of money through influencers’ accounts. They use their goodwill and name to attract people and make it a way to earn money. They endorse products and services and earn commission on them.
Investment in Multiple business ventures
Though entrepreneurs run their startups, they do invest in other businesses as well. Purchase shares, or be a partner in the business. Since they are focusing on their own business, they do not get completely involved in the side hustle, rather they invest money or skills and expertise. Besides, getting profit from their own business, multiple other businesses helps them earn huge amounts of money.
Sometimes, entrepreneurs purchase an existing business to expand their source of earnings. Such as Elon Musk recently purchased Twitter, and the Facebook owner Mark Zuckerberg purchased Instagram.
Online courses
The general public looks for different ways to learn how to do business, or how to earn money. Successful entrepreneurs offer online courses and make them a source of earning huge revenue. These courses are made available to subscribers, and those who enrolled for these courses and make limited access to create awareness about the importance of the courses. Therefore, it attracts the majority of the people. Secondly, these courses are coming from people who are successful entrepreneurs with hands-on experience, which creates trust and a sense of credibility.
Besides these, there are several ways entrepreneurs use to make revenue. Digital transformation has completely changed how people use to make money. Few of the common digital platforms that are used to earn money include:
- YouTube
And there are many more platforms available to earn money. Even for students, who want to earn money, there are several ways available for them. Such as freelance content writing, graphic designing, video editing, virtual assistant, and many more. Entrepreneurs can sit at home and run businesses through virtual platforms. They do not even have a physical presence or office from where they operate.
Final thought
In today’s world of digitalization, the ways of earning money have increased drastically and entrepreneurs capitalize on multiple streams of income. It is not necessary to have multiple sources of earning in the beginning as it will put pressure on you and your business. Rather, initially focus on a single idea or business, and make it successful by putting all your efforts, energy, and time. After success, slowly you can build another source of earning such as starting a youtube channel, or social media influencer or can start affiliate marketing.
It is common among people to do two things side by side such as a job and also freelancing. With a job, people start a side hustle and slowly build it over time. Also, remember, that entrepreneurs don’t start earning from different sources right away. Rather, they spend years and years settling on one single source of earning. With success, they diversify their business and start focusing on other means of making money. They know if they start focusing on multiple things at the start, they won’t be able to get success.
Those you see with multiple streams of earning have years and years of hard work and struggle to put things into perspective. Also, starters face challenges finding financial assistance, human resources, or skills to build a business. Therefore, always remember, do not get trapped thinking about multiple sources of earning money. Rather, think about earning a consistent source of income.
