Like most lessons in business, Natasha and I learned the hard way about the importance of diversifying revenue streams. It is safe to say the concept of diversifying was always percolating in the back of our minds, somewhere back with the importance of partnership insurance and documented job descriptions for the two of us. It was not until there was a major blow to our business that we really got it and diversified the heck out of bebo mia inc.
It was the end of 2013, we had had a huge year of growth, too big in fact and we we were spread so paper thin we were practically translucent. We offered amazing services for our Toronto clients with our brick and mortar model delivering fertility, pregnancy and parenting services as well as pre and postnatal fitness classes with our sister company Baby & Me Fitness to new and expecting parents. We had locations (with high rents) all over the city and our teachers were making more than the three partners combined. Our overhead just kept growing and the balancing act of keeping it all going was slowly becoming harder to manage and pieces were dropping.
When it all falls down
You can imagine this precarious business and financial situation. There were many sleepless nights and constant 80 – 90 hour work weeks. Then Natasha’s husband got transferred to Vancouver, 4500 km away and I found myself standing in a mess.
So, we did what we should have done earlier, and we diversified. Truly diversified, not just added MORE of the same classes at different days or times. We moved online. Yes, we still offered our classes at our brick and mortar, with an expiry date in the back of our minds as the overhead was insane. But the thing that saved our business was offering new services and products to our existing markets as well as to new markets. We continue to diversify annually to ensure we never again face the possibility of having to close our doors.
How we did it
1. Our doula training went global
We had been quietly offering a training for our staff in our clinic in Toronto to get them prepared to offer the quality care our clients came to expect. But then we made it more formal. We offered a 13 week live online Maternal Support Practitioner Certification aka doula training that contained all of the elements that were missing from the trainings that were available. Now we were serving parents with birth and postpartum services in Toronto as well as the practitioners who serve these parents all over the world.
2. We started offering digital business products
We offered products for birth, baby & parenting professionals to support them with setting up and growing their businesses. Our Kickstarter Package is a business in a box, with templates for their appointment guides, client tracking and contracts. This is actually two tips in one – this was a product that had already been created from running our own business. We didn’t try to reinvent the wheel. We looked at the assets we already had and monetized the ones that would also set our students up for success.
3. We offered a membership
OK, this piece is one of the more challenging parts of our diversification. Yes, it is constant income AND it is constant work as well. Before jumping in and creating a membership, ensure that you have the time to nurture and deliver amazing original content for your community regularly.
4. We offered software
This was one of the most exciting pieces for us as we had been tweaking and developing our own online course software with our developer since we shifted our business several years before. We knew that we wanted to go the custom route as the idea of paying a rental fee FOREVER to an online course platform and never actually owning our own was less than appealing. Again, our students started asking what we used to deliver our courses and asked how they could get their hands on it and the online course creation web template Beez Kneez was born.
5. We set up affiliate links with other businesses
Our business strategist, Judi Hughes, always gets us to look for the lowest hanging fruit and affiliate codes are just that! Setting up affiliate programs with businesses, such as Amazon or people with businesses who deliver online courses that you find helpful, means that you make money with little to no work. Those are the revenue streams that are the best as they do not take up your time.
Once you have started to diversify your business then you can continue doing so within that stream. For example, once we had created the platform and had set up all of the operations for delivering an online course, we could then offer more online courses. Or once you have set up your online shop, and it is working, then you can offer more products. Or you may go the low risk way and start drop shipping in addition to setting up affiliate programs with brands you love.
By 2015 we had many streams of revenue for our business, so we took a step back and evaluated our income sources. We stopped offering any of the streams that were functioning at less than 30% net profitability (i.e. all our brick and mortar services). This is also an important step. Make sure that you stop and assess all the streams annually. If one of them takes a lot of time and makes you little money, get rid of it! Pro tip: make sure that you are evaluating how that stream impacts the others before you cut it. If it is the biggest feeder into your other streams, it may need tweaking rather than cutting.
Do not be afraid to pivot within your business. That was a major lesson for the #bebobabes as we move into our second decade of business. Getting stuck in a model, especially if the model is not working, will stunt your business growth, cost you loads of time and money and will burn you and your business out.
As always, our promise to you today, like everyday, is that we will give you real and simple-to-use information from our experience. And, when applied, it will help you build and grow your pregnancy, birth and parenting business!
Bianca Sprague is a birth doula, lactation educator, childbirth educator and business consultant. She and her partner, Alana, are the moms to their 10 year old daughter, Gray. Bianca is the CEO and co-founder of bebo mia inc. and Baby & Me Fitness.
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