Do you have all your revenue eggs in one basket? It’s the classic situation many entrepreneurs find themselves in – and it’s a precarious place to operate your business from.

If you have one big client, one main offering or one key industry that provides you most of your revenue, then you have left yourself vulnerable to many forces you can’t control.

Knowing this, many entrepreneurs strive to diversify their income with information products, the “funnel of offerings” or spread themselves to thin into many different industries.

Right idea… but if you swing too far into diversification, you’ll find yourself in the land of Bright Shiny Objects.

That’s when you chase too many ideas and opportunities only to find yourself overwhelmed, stressed and with lackluster results in all areas. Plus, there is that tendency to try to be everything to every body just to make sure you always have enough business – then you just blend in like plain vanilla.

So where is that happy medium where you find the optimum approach to diversification without losing focus? I call it the “Sand Pail Approach.” You’ve probably heard this analogy used for time management. I like to use it for ideas on how to stabilize income.

If you think of your core, high-paying clients as big rocks that fill a pail, you’ll probably notice there is still a lot of empty space around them. I like to think of the different levels of programs and services as different size rocks:

- Big Rocks –
Big rocks are your big anchor clients/projects that pay a lot of money. It could also be a joint venture or partnership that is a big supplier of business. An example of this in my business these are my Private Clients. You probably only have just a few of these kinds of clients as they take up most of your time.

Of course if even one of your big rocks goes away you are in trouble. This actually happened to me a few years back when I over-relied on two very large marketing partners. I got 75% of my referrals from them until they added a similar program – and my referrals dried up immediately!

- Small Rocks -
Think big-ticket product sales, large events or a vendor who makes large purchases from you. The small rocks fit nicely around the bigger rocks filling in big gaps.

I offer small rocks like a two-hour strategic planning session, my CEO Factor System and Virtual Team Building System.

- Sand -
The sand fills in the space around the rocks as it’s quite small. These are clients that have a shorter time requirement and pay you less. They could be short turn around projects, highly leveraged group programs or retainers with very little one on one time. My Fast Track to Six Figure Coaching program fits this model for me.

A key to your sand is setting up opportunities to generate consistent income without having to sell every day. Think recurring payments.

- Water -
Even though your pail seems full, it’s not. The water seeps through the sand, filling your pail to the top. Small fee products or low-cost monthly continuity programs would be your water. I have multiple “water” programs like my Power of the Virtual Team ebook and the Extraordinary Results Academy.

The idea here is to understand how to use this analogy in building your business model. As you explore ways to stabilize your income, and not be overly dependent on one type of revenue stream, make a list of the types of smaller rocks, sand and water that you could either offer to the current industry your serve or to other industry’s with similar needs.

If you need help figuring out how to stabilize your income this year, the Fast Track to Lifestyle Business is perfect for you. Groups are forming now.

I’d love to hear your ideas on how you are diversifying your income to create more stability by sharing in the comments below.

------------------------------

Spread the Word:

 digg this  del.icio.us  Technorati  Blogmemes  Ask Jeeves
 Furl  Reddit  Rojo  Simpy  Spurl
 Socialize It  Earthlink  Google  Netscape  Windows Live  Yahoo

------------------------------

This entry was posted on Thursday, January 14th, 2010 at 8:31 am and is filed under Business Goals. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.