Don't Make this Small Business Mistake: One Profit Center

"You gotta have multiple profit centers. This is probably my favorite piece of advice and certainly one I have shared several times over the years. It comes from Barbara Winter in her great book, Making a Living Without a Job.

The idea is both simple and important. Just as Starbucks started out selling coffee and now also sells food, music, Frappuccino’s and so on, so too should you figure out additional ways to generate revenue, aside from your core business. It evens out your business cycle and helps ensure that you will be around for the long run. ​~ Steve Strauss​, online columnist for USA Today & author of The Small Business Bible."

I agree, one of the biggest mistakes small business owners make is have only one way to generate income. For example, say you are the owner of a cupcake shop, which only sells cupcakes, only from your shop. With this offering you seriously limit who you can sell those yummy cupcakes no matter how amazing they are. To generate more income for this business you could increase your product line increasing your target market (adding birthday & wedding cakes.), open an online store, add delivery to increasing your sales reach. 

During company build the goal for C2 Your HealthLLC was to have: 

• independent multiple streams of income
• attract automatic reoccurring customers 
• utilize the same target market 
• increase business network that fosters relationships 

First, we offered health coaching first face to face, adding groups coaching teleconference style, then video conferencing. The strategy once a service or product was fully developed meaning reaching projected sales goals the next profit center was added in this order 1. Health Coaching (individual & group) 2. Business / Worksite Wellness 3. Product Partnerships (residual income) 4. Community Events (annual reoccurring events). 

Benefits

Besides making more money the benefits of having more than one profit center are many here are the ones we experienced:

• Everyone knows business runs in cycles, you know seasonal, with ups and downs. Having more than one profit center helped to offset the monthly, and annual ebb and flow of our business. At C2 Your Health LLC we have very few "slow" months. 
• Reduces the risk of being left without any income. If one source of income drops, you have other sources to help you get by.
• Creating several profit centers to include residual income reduces the need for a larger client / customer base plus produces a base monthly income that is more stable. For example, C2 Your Health LLC added services supporting healthy lifestyle (One Simple Change), nutritional support, whole food products and indoor gardening supporting sustainability.

Consider this before adding a new stream income:

• Does your business have a fully develop mission, vision and purpose? If so, then ask yourself does this new service, product or expansion easily fit into your overall company goals?
• Is your current business fully developed and on target? If not, adding a new product or service may derail your current business. 
• Do you have the help and resources to add? The "law of attraction" tells us what you focus on grows. So, is your current business sustainable without your constant attention?

Mistakes business owners make 

For more than 10 years I have mentored individually over 100 women and thousands while producing community programs (expos & summits) these are the mistakes I most often see business owners make when adding new profit centers:

• Too soon: Product / services too soon in your company timeline. It’s nearly impossible to launch more than one business start-up this leads to both company’s failing.
• Unrelated: Product / services that are not part of your company mission, vision and purpose. In this case you end up creating an entirely new business, in addition to the one you have.
• Lack: Of support / resources to stay on top of every income stream resulting compromising your company’s future.  

I recommend before making any big business decision seek the help of your local business

resource centers (SBA, SCORE), reputable business strategist (coach), and a business mentor to help guide you. 

Be healthy. Be connected. Be You. 

Cindy Cohen RN BS BA 

Owner, C2 Your HealthLLC  

Founder, C2 Your Health Women's Initiative Inc. 

More about Cindy Cohen

C2YHWI is a nonprofit organization mentoring women entrepreneurs, new start ups and seasoned entrepreneurs and produces the Women's Entrepreneur Summit annual conference. 

To learn more click here, to make a donation click here  

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