I’m a firm believer in creating multiple streams of income.
To create numerous income streams, you will potentially have to sacrifice perfection.
I’ve been willing to lower my effectiveness to tackle multiple projects in which I had an interest.
The strategy paid off for me when COVID struck, as a few of my incomes hit zero (even less than zero for our short-term rentals).
If I had been reliant solely on a single business, I would be out of business and hunting for a new job as I write.
But instead, I have been able to operate on various income streams while we continue to pivot and adjust focus for what this new world throws at us.
Let’s talk more about what I have learned in the last five years about the pros and cons of generating multiple streams of income.
Pros and Cons of Multiple Income Streams
Some upside items.
Following interests and passions.
These are the most significant upsides.
I love to sample and try new things out (I believe life is a giant adventure).
These downsides are on the same coin as the upsides.
Lack of focus.
Becoming extremely successful in a single venture typically takes extreme focus.
By diversifying attention, you risk becoming a ‘Jack of all trades but a master at none.’
There’s nothing wrong with this.
Especially if you are working on businesses that bring you energy.
That’s the key.
Businesses that I’m involved in include a local media company, event production, Airbnb rental properties, a local franchise, and brokering real estate.
Our event production business went to zero. We had advertisers because they were no longer producing events.
In April 2020, every Airbnb booking that we had for our short-term rental properties canceled.
We had no idea what was going to happen.
We canceled the events that we were producing.
It was scary, as we didn’t know what was around the corner.
We pivoted as hard as we could.
When some income streams went to zero, others stayed steady.
I was grateful to have different income streams.
But it also alerted me to how I was operating.
My New Found Idea
I recently performed an exercise and put all of my business projects on a single spreadsheet.
I did that and also labeled each with the percentage of my time that I devoted to each.
I added the amount of time that I wanted to devote to each.
I realized that there was no way that I could ever grow these projects to their full potential with my current structure.
It was basically impossible.
They were all operating.
But not to their potential.
So, while thankful for diversification, I’ve concluded I’m a bit too diversified.
I’m simplifying, as I want to be a better entrepreneur.
I might be selling one of my businesses at a loss, and another I’ve decided to completely close.
I’ve never been so excited about future potential.
I have learned valuable lessons during the pandemic.
I intend to keep building income streams as long as they are directly related to current projects.
Multiple income streams are important, especially any that allow me to be location independent, like creating a blog business.
I won’t start projects unless I can put rockstars in place to help me run those businesses successfully.
And if it doesn’t align with my passions, I will pass on the opportunity no matter how great the financial potential is.
Life is too short to build businesses that don’t excite you.
So continue to create multiple streams of income, but create them with a focus in mind.
Strangely, I have COVID to thank for this.