Developing Revenue Stacks

The Small business show, episode 387 for Wednesday, July 6, 2022. Greetings, folks and welcome to the Small Business show here at BusinessShow Co, where we are using our business brains and small business ing every single week. Sponsors for this episode include bamb.comsmall where you can go and schedule your free trial and learn all about having your own dedicated HR manager and zapier@zapier.com SBS where you can try Zapier for free. The automation, the glue that holds the Internet together is the way I like to think of it. And then we have another podcast to tell you about a little bit later in the show too. We'll talk about all of that, you know, in a few minutes here. For now, small businessing in Durham, New.

Hampshire, I'm Dave Hamilton and Lafayette, California, I'm Shannon Jean. How are you, man?

I'm good, man. How are you?

Good, good, good. Coming off the fourth of July holiday, very nice.

Yeah, yeah, it was, it was. I enjoyed having the, the, the longer weekend. It's, you know, I mean, sometimes they, they interrupt the flow of, you know, work projects and things like that, and other times it's kind of a nice little respite, and this time it, it wound up being the. Those. Good. Yeah.

So what's, what's better, a Friday off, you know, holiday or a Monday?

Monday.

The holidays we always get typically get a Monday. But you think the Friday's better or Monday.

I like Monday better.

You do?

I do, yeah. Well, just the way my week is organized, it. Well, you know, I say Monday and the reason I say it is because it is easier for me to carve a Monday out of my schedule. Mondays are, are generally lighter days for me. My, my week is backloaded. So my, my week sort of like falls into Friday and then by the time Friday's over, it's like, okay that the, the routine is finished, but Friday is kind of a big day for, with a lot of things to do. So if I have to take a Friday off, which of course I do, occasionally, I have to, like, rejigger a lot of things, a podcast schedule and some other stuff. Whereas Mondays is. I can just like, I mean, I could take Monday off most weeks and I'd probably get away with it without people noticing. So. Yeah, that sounds pretty good. Yeah, yeah, yeah.

I like Friday because I feel like for my schedule anyway, you know, you get towards the end of the week and that you kind of like, oh, okay, I can, I can cut loose. Whereas Monday, for me, I feel like I hit the ground running Tuesday and I feel already behind there is that.

Today we record this on Tuesdays and I have felt behind today. I didn't wind up doing any of my normal sort of email catch up over the weekend. We were away all day on Sunday visiting some family elsewhere and so I just had a lot to occupy my time and so I usually even hit the ground Monday. Sort of caught up Tuesday. Yeah, especially not so I don't know. Yeah, I think a four day weekend is probably the way to do it.

There you go. I think a lot of people would agree with that. Yeah, yeah, yeah. That's interesting. Well, I would argue that you could for many businesses you could definitely do a four day work week and get just as much done and be just as productive.

We experimented with that more so with Backbeat for a while we, we all took Wednesdays off for a while. Well, I mean I say we all took it Wednesdays off. I, I didn't. But, but the team did and yeah, the, the productivity was, was, did not change. The, the atmosphere changed and in many ways it changed for the better and in some ways it changed for the worse. Yeah, yeah, yeah. But, but yeah, I've always been a fan of that. When I ran, when I sold my interest in the consulting business down in Texas and went from, you know, I started working there, then I became a junior partner there and then I sold my junior partnership as the business was evolving in a different as my partner and I realized we were better friends than business partners. I went back to just being a worker, be there and only worked three days a week. I worked Monday, Tuesday, Thursday and those were grueling days. But that was arguably one of the most productive times of my life. So that's cool.

Yeah, that's great. Hey, I want to talk about today. I want to talk about revenue stacks and we've talked a little bit about them before, but I wanted to take a deeper dive into why they're so important. But I also want to mention before we go on is I've been learning a lot about this. Maybe you've heard of it, this Mark Cuban Cost plus drug company. And I want to talk about it, but I want to wait till next week and, and kind of do an analysis of this concept and how arguably a guy who's got maybe one of the best. Well, no best, but certainly has a business brain that he's thinking about things all the time and this concept that he's him and a few other people have come up with, I think it's fascinating to dissect it a bit.

Yeah.

All right.

Yeah. Okay. I'll put that on my list to dig into. I'm aware of it, but only peripherally. I have not dug into it yet. So I'm, I appreciate the heads up.

Yeah, it's good. I think there's, I was just going to make a quick comment about it, but thinking about it, as we've been discussing this Friday, Monday or four day work week thing, I think it's worth, you know, digging into it a little bit more and analyzing it, how it may reflect on your small business or our small business, this concept that they have of disruption.

Yeah. And let us know folks. Feedbackus show co whether how your business works when you have a holiday that adds to a weekend. How do you do it? Do you do three days with the Monday? I mean, obviously this past week it was dictated Monday was July 4, so there was no wiggle room, you know. But what works better for you? And do you, do you do the four day work week or, you know, do you do the four day weekend? In fact, when my kids started in school, our school district did anytime there was a Monday holiday or a Friday holiday, you got both Monday and Friday every single time, including Labor Day, which was bizarre because school would start the Wednesday before Labor Day. You'd go Wednesday, Thursday, and then you'd be off Friday through Monday, which was a little much.

That is interesting.

But it was every, you know, every single Monday or Friday holiday throughout the year was a four day weekend, which, and it was it. Actually they timed it perfectly for us because I think that lasted through like elementary school for our kids. And then the district just changed it district wide and ratcheted it down to just the three day weekend kind of thing, you know, for those types of holidays. But it was nice when the kids were young. I was like, oh great, we automatically get a four day weekend. Perfect. Great. You know, sounds great.

I love it.

But yeah, let us know. Feedbackus show.com revenue stack. All right, the I want to talk about revenue stack. The other thing I want to do is tell everybody about our two sponsors for this episode if this is a good time to do that. Mr. Gene.

Yeah, these are both terrific resources.

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Back it's a key, key principle in living the charmed life. And you know, and I think especially when the economy gets choppy and we're not sure how things are going to look for the, you know, maybe the next year or so, the, the revenue stack is critically important. I think that's one of the reasons why I wanted to revisit it today.

So let's talk about the revenue stack. Like, let's explain to people what this is, right? The, the way I see it, and maybe you have a different definition of it, although I think we're pretty aligned. The idea is I think of the, I think of my income as coming from faucets, right. And, and having multiple faucets going are all at different rates of flow at any given point in time is this revenue stack to me, right. Like there's, there's avenues that can do from which I can derive income. And, and generally speaking, the ones I'm paying more attention to are the ones that, that push off more income than the others. That's not always true. There's been some businesses in my career where I've had some passive or Mostly passive income. And that's also wonderful. But, but it's this idea for me of having the ability, if one faucet starts to dry up, either through my own fault or through no fault of my own, I have other faucets already built and ready to go that I can tap into instead of having to start something new when one thing just ends.

Yes, I think the key thing is the word end because, you know, the only constant is change. And things are going to change for your business and your personal life, all these things, and pretty much we're in alignment. For me, it's a method at really diversifying where your income, where your revenue is coming from, either for your business or in your personal life. Right. And it's just like investing. I mean, if you go get some advice on investing, the recommendation is not going to be put all your money in one thing.

Right, right.

Or, you know, one company, all this kind of stuff. Diversification is going to spread out the risk and also, you know, increases the opportunity for one of those revenue streams to really take off, you know, and I, I have tried my whole life to get them all to, to be on full blast at, at once and I'm still, I'm still working on that.

Yeah, that's not, I don't know how to, I have yet to learn how to do that. Yeah. But I think it's okay. Yeah, I guess.

Yeah, I guess so.

Yeah. In fact, that was one of the things, you know, when we realized, when we were faced with the opportunity and ultimately the decision as to whether or not we wanted to sell the Mac observer, you know, last year, beginning of this year, it was, that was a big part of the, the decision process for us was, okay, well, we have this revenue, you know, this, this faucet in the revenue stack. And yes, like, you know, we were going to be paid for that asset but to no longer have it. But I had come to look at it, there had been times where the Mac observer was my main focus and you know, derived quite a, from which I derived a bulk of my income. It had, it had become different than that for me. It had become, not passive, but it had become a, as I like to say, a well maintained business in maintenance mode, which I knew at least in the back of my head at any time, if something else dried up, I had this thing I could go and tap and it was, like I said, well maintained and we could turn it into a, you know, more of a cash generating thing if that's what we needed to do. And so Selling that opportunity was, was really one of the hardest things to wrap our heads around was, oh, we don't, we aren't going to have this safety net, if you will. Right. You know. Right. And so, yeah, you know, it made me realize how tied I am to this concept of having a revenue stack. Like how, how fundamental it has become for me that I couldn't just have one thing going. I don't. I think I'd be, I think I'd be very nervous and that'd be fine because that nerve that, you know, that anxiety or whatever it is would drive me to start something else.

So, yeah, it does. And it kind of ties into. There's this concept. I don't know where it came from, but it's the power of having many bosses, which is, it's another way of saying, you know, this revenue stack. And I always, like, people always say, oh, it's so risky starting a business, all these customers. And I disagree. I think it's riskier to rely on a one person, one boss, one large company for your success, some one entity that makes decisions about your future that you may not be a part of, or having someone that has dozens or hundreds of, and I'm quoting here, quote signs in the air bosses. That same diversification, you know, it helps you build wealth and it helps protect the assets that you already have. So similar, similar concept.

Yeah, I mean, it's, you know, they, they tell you when you're investing in, in the stock market, you know, the smart play. And most of the time this is true. Of course you can, you could find individual exceptions to the, to the rule. But the smart play is to not put all of your money into one stock. Right. You want to spread it around to diversify. And I look at this the same way. Now, that being said, it. This is a little different than just investing in the market because theoretically you are at some level in control of what's happening with these businesses or with the relationships you have with these bosses. So, you know, it's, it's a little different. But yeah, I'm, I'm, I definitely, I'm in agreement with you that, yeah, you need with just one. I've always said if you have just, just one, even if you think you're in business for yourself, if you have just one client, you. You're working for that client. That's it. Yeah, exactly. Yeah. They control your future.

Yeah, yeah, that's right.

And that's okay like that. But that's, that's a great way to get started. I Know, plenty of people who have started their own, especially like consulting practices or whatever with one big client, but don't just, you know, stay there. They, they grow the business, they find other clients while using that one client as an anchor. I don't want to say stepping stone because that makes it seem like that one client isn't important, but using them as the path to being able to create, you know, a business around it, I think that's, that's great. But one client is not a business idea. One client's a beginning.

Yeah, that's right. So, you know, your business brain, if you're thinking like a business person, you know, you should always be thinking about this revenue stack idea along with this, you know, many bosses concept. And if you apply that framing to just how you think about your company, whatever you're working on, it's going to help you expand that out and develop a revenue stack. And, you know, that's the thing that, you know, I think we need to dive in. Next is how you actually go about starting one.

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What, what.

How do we get. How do we get somebody started?

As I was, yeah, I was listing these out. You know, I was like writing some notes here for the show. And I mean, the first one is you know, step one, start a small business. I mean, we've been telling you how to do this for 386 episodes. You can go back and basically find a primer on every single topic related to that. And it's taking that step to get your business going, whether it's like Dave mentioned earlier, working for one customer and using them as a foundation to grow your company, but getting started, that is just the first and foremost, the most important thing. If you already have your business up and running, we should talk about adding products or services to your existing business. And we've done that a couple times. We did a whole episode on adding subscription services to your business. Things that you may not have thought about that you could sell as a subscription. And we'll put a link to that in the show notes. And we did another episode on adding recurring income, just, you know, a little different than subscription business, but just that that recurring income that you can count on. So, you know, your existing small business, I guarantee, has areas that you could push out and increase and start different and various revenue streams coming in.

Yeah, yeah. Okay. Right. Looking at what you have and where, can you tap into that, perhaps from a different angle. Right. Is that a.

That's right.

A good way to look at it? Yeah.

Okay.

Yeah.

A good example is if you're a contractor, let's say of some sort or H vac or something, you're going to businesses or even, you know, or residential places, if they've let you in their building or in their home, they've already given you some level of trust and credibility. And what I've seen around here, there's a company that in the beginning, they were just doing, like, H vac stuff. It's called Philco. I'm sure the guy who owns his name is Phil. And so as.

Good guess.

Yeah, yeah, yeah. As their business developed, I just saw them adding more services. And they're for commercial buildings, and I've used them in the past and. And they would add, oh, you know, we're inside your building. What other maintenance things can we do for you? And, you know, repair services. They added, like carpet cleaning services. They added, you know, all these different things until they're massive. I mean, their. Their company was much bigger than mine. And I when they first started, I know they were, you know, just. Just a couple of guys. But leaning into that trust and credibility, when you're inside someone's facility, it's just a great opportunity to add new services to your mix.

Yeah. Okay, so this is a great example for A lot of reasons. One of them is it's different than what we were talking about earlier. Whereas this is not necessarily starting a brand new business, but diversifying the income streams of an existing business. And I like this idea. Right. Because both are fully valid. There's nothing wrong with either one. But I'm glad you brought this example up because, because it, it's good to highlight the fact that, yes, you, you don't have to just leave one business alone and go start something completely different. You can, you can do this, you can employ this revenue stack concept in an existing business just by beginning to diversify and experimenting with other things. I love this idea of, you know, you're, you're already in your clients lives or in the case of H Vac, literally in their homes. What else can you offer? You know, when we had our consulting business, we talked about running our own isp. Right. Our Internet service provider.

Yeah.

You know, and we found that that was going to be far too much of an investment for us. But that would have been a, a natural extension of our business. Right. You know, where you're trusting us with this. Of course you would trust us. You're already asking us for what is our favorite isp because you're going to go sign up for them. This was back in the dial up days and I'm really glad we didn't get into the dial up game. But you know, it would be very easy for us to recommend ourselves because theoretically we would build a business that we would trust and want to recommend. And so. Yeah, I like that.

Yeah, yeah, it works. On the flip side, it is, hey, let's start a brand new business, but using the resources that you already have or your knowledge. And as an example, like our deals on the web business that we ran for about a decade.

Yeah.

You know, Dave, and you know, you had the technology and advertising background. I'm a deal guy. I was already doing lots of things and finding, you know, this kind of content for myself. And I was in that, you know, ecosphere at the time and just bringing those two things together. And we created a successful company that, you know, it generated significant revenue and we both learned a tremendous amount. And it wasn't that we had to go learn something else. It was that we just had to package what we already knew in a different way.

That's right. Yeah, it was a new business, but it wasn't. And there were certainly things that we needed to learn whether we knew it or not going into it. But we weren't starting from scratch.

In.

The things that we were doing, it was not the first website that I had ever published. It wasn't the first time you were like curating deals. Right. So we took these things that we both knew how to do and we're sort of already doing, had some infrastructure, in fact, and, and just created something different to package up and. Yeah. And make some money. It was great. Yep.

Yeah, yeah, it worked out great.

Yeah.

For your personal revenue stack, you know, starting a side hustle, you know, you hear everywhere people talk about it, doing things to make extra revenue. We, I did, you know, episode 380, we talked about how I started a side hustle and you know, it's a million dollar business now and it works out great. I love it. I've learned a tremendous amount. And it was again, using skills I already knew about, but with a completely different product line that I knew absolutely nothing about.

Right.

But I guarantee you have skills and, or, and, or access to information or, you know, something that you can get a business or some sort of revenue generator going. And I would say don't overlook the, I call it the power of small sums. You know, you've heard me say before on the show, hey, if you can make 500 bucks, you can make 5,000 and then you can scale it, make 50,000 and make 500,000. But that, that first small chunk of money is, is or can be challenging.

And, but it can be the most important one because it teaches you that you'. Something, it's. Think of it as the spark that lights the fire. Right? Yeah.

And a proof of concept.

Right.

So you can see, oh, look, I'm making a little bit of money and.

Somebody paid for this. Like I did a thing. Whatever it is, you created a product, you have a service, you made a website. Whatever it is, if, if somebody pays you for it once, okay, you're onto something. Now you might have to tweak and, and rejigger some things to make it appealing to more customers or whatever. But the one person that is the one company, whatever it is, the one, the first customer, the first dollar that comes in, the first $5 that comes in, that's key right there because it lets you know, aha, I've got something here and I can go with it. And I would say, go ahead. No, I was going to say, you know, it's, it can be hard and it is, it can, you can find yourself in a position where you say, well, I just don't know what that other idea would be. That's fine. Embrace your impatience, though. Don't let that die out. If you are, you know, if you realize you have, you know, one or maybe even three items in your revenue stack right now, but you want to have five, stay with that. You will. All you have to do is focus on wanting more and the ideas are there. You will notice them if you are looking for them. So don't worry about not having the idea of. Just embrace your impatience about it and you will start to see the things that might become the spark for that next business.

Yeah. And to your point, none of this is easy. We talk about it, you know, and we're fluid in this because we've failed so many times at trying to make it work. Right. And, but you, you don't have to hit it out of the park with, with every single thing you're not going to get. Yeah. It's just not going to happen. And I can tell you story after story, you know, I still own what I would argue is the most expensive television set in the world because I had the foolish idea to get into the TV business at the absolute wrong time. And I keep that TV to remind me that, you know, hey, that cost you like a quarter of a million dollars right there that I never made back. And so starting small, trying new things and you know, really seeing what works, generating a little bit of money and maybe you find some little business or side hustle or new part of your existing business that just generates a small amount of money. But you know, if you own a business and all of a sudden you're generating even, you know, an extra few thousand dollars a month that may pay for another employee to help you, you know, ramp up something else. And you just never know where it's going to lead. So the key is to try it.

Yeah, yeah, that's the key. Yeah, exactly. Yeah, yeah, yeah, yeah.

And the thing, the thing I'll a couple things. You know, I stole this, this stack concept from, from Scott Adams and he talks about it in a relation to a talent stack and is that you should diversify your, your talents as well and not count on, you know, being the best at one single thing, but rather you should know a number of things that have give you a broader set of skills in life to make you more successful. Same concept with this revenue stack. Not putting everything into one laser like focus that certainly can be successful.

And history is full. The world is, it's not even history. Present day is full of plenty of people who obsessively focus on building one business and doing one thing with that business. And are wildly successful with it.

Absolutely.

If the risk is much bigger, the reward can be bigger. But, you know, if you look at the. You. I would, I would argue, though, that those people, if you dig deep enough, you will find that at the very least, it's not the only thing they ever tried. Right. They may be laser focused on it right now, but there was likely a time where they seemed like a scatterbrained maniac doing all kinds of different things, and one of them started to take off and they chose to just forget about everything else and focus on that. There's nothing wrong with that, but that. That's.

Yeah, you don't hear about most of those things.

Right.

They're focused on the. The story. And, you know, I mentioned Mark Cuban earlier and wanting to talk about this current thing. You know, this guy's whole history is riddled with failure and, you know, talks about that stuff. That, that, that's just the way it is. But the story he tells is, oh, you know, Broadcast.com and I plugged in the. I wanted to listen to the baseball, you know, show on the Internet. Couldn't do it. Da, da, da, da. Well, that's looking back and creating a powerful narrative.

What was it Steve Jobs said that. That it's the only way you can connect the dots is going backwards. You never, you never actually see them when you're going forwards. Let's just.

That's right. Yeah. Yeah. You can't. In a lot of ways, that's what you're hearing when you listen to, you know, Dave and I is that we're connecting to dosback, trying to help you, you know, go forward. The, the last thing I want to say about revenue stack is a common. I don't want to use the word excuse, but I'm gonna. I'm gonna use anyway. Common excuse. I hear that. Oh, I just. I just don't have time. I don't have time. I'm so focused just on my current business. Well, I would argue that you need. You either haven't read it or you need to go back and read the E. Myth or read it again and learn about delegating and replacing yourself at your. At your business and getting out of that superhero complex. And if, you know, if you're. If you say you don't have time to start a side hustle, I would say you're probably all caught up on all the current Netflix shows and you could talk about those like crazy, but you're giving up a few hours every evening that you could be doing something to change your life.

Yep, yep, yep. Yeah, I'm not caught up in the Netflix stuff, man.

I'm a little bit, but I'm an older guy now. I've done this.

Yeah, yeah, yeah, yeah.

A little more time on my hands. But we'd certainly love to hear what you think we got right, what we forgot, what we got wrong. What sort of revenue stack have you developed over time? Feedbackusinessshow Co. And also come into the Facebook group at businessshow Co Facebook and share your story.

Yeah, I am very eager to hear. Now that we've dissected this content concept of the revenue stack. I know there are some of you out there who are saying, wait, I'm already doing that. Even though you might, at the beginning of the episode, might have said, oh, this is something I want to learn how to do. I want to hear how you're employing this revenue stack or how this relates to what you're doing. Because I think there's a lot for all of us to learn here and that's. That's why we get together. It's to share the business brain. So thanks for hanging out with us, folks. Thanks to our sponsors, Zapier.com SBS and Bambi.com Small and go check out this week in tech as well. Great show. Keep living that charmed life. We'll see you next week.