Multiple Revenue Streams Will Kill Your Business

Everyone tells you the rich have 7 income streams. So you start 7 things, you spread yourself thin, you go broke. You know the story. Here's what they didn't tell you. Every one of those extra streams of income came after they got their first stream of income to at least $1 million in revenue. Focus first on your first revenue stream. My rule is one problem, one offer to $1 million. That's what you need to do. Here's the truth that most of us forget. Your attention is finite. Focus. Today, I'm going to show you exactly why multiple revenue streams too early will quietly kill your business and the hidden tax that nobody's telling you. Let's go. Before I go any further, let me be crystal clear about what I'm not saying to you today. Okay? I ran 2 businesses for a decade, Webinar Ninja and this podcast. Some already kind of saying or even typing in the comments, but Omar, you did the opposite. First of all, those are 2 separate businesses and I'm talking about multiple revenue streams and offers in one business. The other thing I have to say is that the podcast was already making $1 million in revenue before we went all in on Webinar Ninja. I'm not saying never build more than one thing. What I am saying is don't stack multiple offers inside one business before that business has proven itself before you have a winner behind your business. Let's talk about why. I've been around a lot of entrepreneurs in the last 20 years, beginners, millionaires, billionaires, you name it. And people that think multiple revenue streams makes them smart, makes them savvy, makes them sophisticated, makes them some sort of a serial entrepreneur, right? Real buzzword you'll hear a lot of. I'm hedging my bets by having diversified my revenue streams. I'm not putting all my eggs in one basket. Right? This is what you'll hear a lot in the business circles. It sounds wise, right? And the language also sounds like you're being cautious and you're being responsible. But at the start of your business, it's not smart. Diversification is a strategy for protecting wealth that you've already built. But if you have nothing, you are not protecting anything. Diversification is not a strategy for building in the first place. When you have nothing yet, spreading yourself thin doesn't reduce risk, it guarantees that you'll be mediocre at many things, okay? 'Cause you're not focusing your resources, your time, your energy, your effort, your team into one thing. You don't diversify your way to being successful at what you do, especially at the start, right? Your focus is what you need. You need to focus on being great at one thing, at delivering a solution to a problem to your customers. Now, you already heard me say the word focus a million times already on other shows and a few times already on this episode, but it's really a superpower. And the truth is that every wildly successful business that we all know came from hyperfocus. OK, I'm going to give you an example. Meta, like Facebook, when they started, 4 years, we're talking about 5, 6, 7, 8 years, they had one revenue stream, ads. That's it. And that's all they did. They focused on how can we make the most money possible and become the most visited website possible so people can see the ads that we're selling. Let's talk about something that's fairly new. OpenAI and Claude, these, these companies that are selling AI services to you, right? They don't have multiple revenue streams. They have a monthly subscription for higher tiers. That's it. It's simple, right? That's how you pay for that kind of service, right? You might be able to pay for credits, but basically it's just one revenue stream using this chatbot. I have a new local cafe down the street from me and it only offers coffee. No food, no croissants, no muffins. Just coffee, and they do it exceptionally well. They have a huge line out the door because what they do— coffee— they do it very well. I'm encouraging you to master one thing before you build anything else. Make sure you have a winner on your hands. Make sure you have a winning offer that your customers are hungry for that gets you to at least $1 million in revenue. Focus isn't a limitation. It's a real weapon. Okay. Because here's what happens when you do this. Here's who you're competing against. Let's say, for example, your business has 3 offers. Okay. And you are trying to make sure that you're serving all 3 offers, all 3 products, all 3 different types of customers, right? You are competing against other companies. Let's just say there are 3 other companies that are just focusing on one offer, one of each of your offers. They're competing with you with each of your offers. That's all they do. So they have all their energy, all their time, all their effort, all their marketing, all their resources going after that one customer while you're trying to go after 3 different kinds of customers and 3 different kinds of offers to maintain and 3 kinds of other stuff. This is what I call the hidden tax of every revenue stream. There are things that you're going to have to pay for that you do not see just by having more than one offer. Here's the truth that most of us forget. Your attention is finite. Every new offer offer, every new revenue stream that you build splits your attention. You're not able to improve your product the same way if you just had one product, okay? Making it genuinely great, really just waking up every morning saying like, how can I make this product better? How can I make my offer better? How can I make this easier to buy? How can I make sure my customers are getting the most value from this one thing? When you split your energy and your attention against 2, 4, 6 different offers, It's very hard for each of those to really win. And there's also an operational tax you're going to have to pay for every time you create a new revenue stream, right? There's more to manage. There's more manpower that's needed. There is more costs involved, services, servers, tools. You're going to need more overhead. Every stream needs its own system. It needs its own support. It needs its own marketing. It needs its own maintenance. They're really hard to just kind kind of set and forget. They're just gonna die a slow death if you do that. You have to just continue to feed that beast, that stream, as you are going along, and you don't have infinite resources. Listen, I've tried this, and I struggled with this a lot in my life and in my business, and what I found is that 2 mediocre offers cost you more than running one great, awesome offer that earns you a whole lot more in profit. The other thing is that every time you open up a new revenue stream, the problems I just listed compound. It becomes more of a problem, it slows you You have less resources versus the opposite. When you're just focusing on one thing, your focus multiplies all your efforts. It allows you to really move quickly and progress a lot faster. I hope today's episode's been eye-opening so far, but I wanna make sure you subscribe to the show because we have an upcoming episode I don't want you to miss. It's called Why Most Podcasts Never Make Money. I've been running this podcast for 12 years. We're celebrating 12 years on August 14th. I know the business of podcasting and I know what the numbers tell me. I know that less than 1% of podcasts make money. Of podcasts actually make any money on sponsorships. We're gonna go deep on why you should start a podcast, what are other ways you can monetize outside of sponsorship, and if it's worth your time and effort if you're willing to make that commitment. Make sure you subscribe so you don't miss it. So I wanna talk a little bit about why I say $1 million should be the threshold before you move on to a new revenue stream. A lot of people think it's about the money. It's actually not about the money. It's about proving that you have traction, that you have product-market fit, that your product now is good enough and it's proving itself in the market where other customers are gonna enjoy it enough to tell other people and market your product for you. When somebody tells me that their business has crossed $1 million in revenue, it tells me a bunch of things. It tells me that they have a validated product that people genuinely want, 'cause that's not an easy milestone to hit. They have real systems that they've built so that it enables them to run this business. They have a team to run this business, or they have the profit to build a team. They have customers that are happy to be marketed to and are liking what you're marketing, at that point, the machine is kind of working for itself in a lot of ways, and it's not gonna require 100% of your attention. Okay? You could start to dedicate 20% of your attention into something new. Now, I, I do have to say something, that $1 million in revenue is a milestone for product-market fit, and that you have a product or an offer that people want, but it doesn't mean that you're financially free because I don't know what your profit is. Okay? I don't know how much your expenses are and how much money you're keeping out of that million dollars in revenue. This is why it's so important to have a P&L sheet, profit and loss sheet, to know if you are making the right amount of profit so that you can reinvest in the current business and reinvest or invest into your new revenue stream. And of course, you have enough to live. But if you're not there yet, like I said before, one problem, focus on one problem to solve for your customers. And that solution is called an offer. You're making an offer. Hey, I can solve this problem. By XYZ, whether it's a tool, a software, a service, a course, a coaching program, whatever it might be. So one problem, one offer to $1 million. That's your goal. By having that focus, it's going to allow you to just wake up in the morning and say, this is all I got to do. Let's get into the details because I want to get precise about what is a revenue stream, what's not a revenue stream. Okay, so upsells, downsells, these are not separate revenue streams. These are ways for you to make your offer more appealing. Okay, so if you have an offer and then you have an upsell after the offer, like I'm gonna give you some templates to go along with this course, then that is fine. That's not a revenue stream, that's just a way to supplement your current offer. Or a downsell, which is like, hey, they don't buy the main offer, but you have like a short version or a smaller version of your bigger offer for a lower price. In this umbrella is also like premium tiers, add-ons, these types of things. At the end of the day, what I'm talking about is solving one problem With, you know, a solution. Now that solution might be broken up into parts, you know, so that you can be able to help them in some way and break up the value, which is called like making sure that you're giving people what they want and they're only paying for what they need, you know, by doing, breaking it up into tiers or breaking it up into, you know, add-ons, things like that. That's totally fine. What I'm talking about here is selling a completely different solution for a different problem for a different type of customer. And the test to know if this is a new revenue stream or not, just ask yourself, Does this make that one thing that I'm focusing on better, deeper, easier? Then that's not really a new revenue stream. That's just a supplemental add-on or product or offer inside of the main offer, right? It's sort of like a tier. Or is it a separate thing altogether pulling me away or pulling me into a new direction to solve a different kind of problem? I want to tie this up for you so it's so simple for you to remember. Number 1, multiple revenue streams often sound smart, but Diversification is often a distraction when you're getting started. Remember, one problem, one offer, $1 million. That's the goal. Understand that even when you hit that million, you have the choice not to diversify. You can just double down on that offer, double down on what's working, and can continue to grow that product and your customer base, right? Why? Because every new revenue stream has a tax. More attention is going to be needed on that revenue stream. Money, Manpower, overhead, you name it, right? You get the point that it's like building another smaller business in your business. Remember, upsells, downsells, they don't count. Add-ons, they don't count. If you're solving the same problem, that's fine for the same type of customer. When you are ready, meaning you've hit that million-dollar revenue and beyond, and you want to diversify to protect your wealth, that's fine. And you can start to do that. I also want to add that a lot of people forget the fact that the whole point of running a profitable business is that you make money. Okay. And you can let money work for you. You don't necessarily need to take that profit from your business and build a new offer or build a new product or build a new revenue stream in your business or a new business. A lot of people are just like, this is what I know, business. No, you could put it into a Vanguard fund, right? And get 10% from the S&P 500, right? You could take a dividend and diversify that way. It doesn't have to be Another business or another revenue stream. You could buy a piece of real estate. There are many ways. This is not financial advice, but I'm saying to you that don't lock yourself in and say, "Okay, I hit that million. I now have to come up with some brilliant idea for another revenue stream." No, you are in a very comfortable spot now where you can start to take that wealth and allow that money work for you. I hope today's episode helped you rethink revenue streams. If you want to continue learning, there's an episode that we recently published called "How to Choose Which Business to Start." If you're new to the game and you're like, "I don't know if I should do a." I don't know if the idea I have is a good idea. How do I leverage my current experiences? All that is in that episode. So make sure you scroll back on whatever app you're using, whether it's Spotify or Apple or YouTube or whatever it might be. That episode is killer. How to choose which business to start. Go ahead and check it out. Thanks so much for tuning in today, and I'll check you in the next one.