What are the New Revenue Streams for SMEs?
Operating a new business for the long term requires continuous cash flow. However, the pandemic has setback the revenues of many significant organizations. Moreover, businesses with different revenue streams and savings can survive longer, especially during a low sales period.
Additionally, higher revenue opens opportunities for new investments, projects, innovations, etc., and enhances organizational growth. It also helps to discover new measures of attaining higher profits.
However, the revenue often varies upon factors like location, products, services, industry, etc. SMEs have options to streams like product sales, services, licensing, expert advice, advertising, online hosting, subscriptions, pay per view, sponsorship, etc.
7 New Revenue Streams for SMEs
● Related Products
Generating revenue through products and services is a primary source of revenue. However, related products and services can act as a secondary medium. These secondary sources offer additional benefits to the customer.
For example, a digital marketing company can provide courses for different aspects of the field. Similarly, car companies can provide insurances, and car wash companies can offer vehicle fresheners and waxes.
Likewise, any offline business can collaborate with a delivery partner and increase revenue by offering free delivery. Besides this, the process helps to reach a larger audience and attain more market credibility and trust. Additionally, it also enables the branding of the company.
Businesses often develop many softwares, processes, courses, etc., through their journey. These help in time and management, besides helping in other aspects, such as organizational scope, resolutions, methods of improvement, etc.
SME owners can license these to credible industry organizations. Besides offering licenses for digital innovations, organizations can even provide them for offline equipment, services, products, etc.
Additionally, owners can provide licenses for publication, mentions, credits, etc., in online and offline mediums. By doing so, the organization would generate new revenue streams and increase its market presence.
● Expert Opinion
Entrepreneurs that have recently started a company often have prior experience or gain it while pursuing a direction. Therefore, company owners become expert in their fields. As a result, experienced professionals can provide expert opinions to newcomers for a fee.
Optionally, companies can offer their subject experts to other organization through collaborations. The expert advisors can also avail money for appearances and publication on digital and offline mediums.
Companies often recruit experts to speak at events, symposiums, workshops, and other events. Owners should find such companies to provide their expert employees and generate higher revenues.
Besides these choices, organizations can even utilize their in-house professionals to offer telephonic and video call advice. These can become a part of the services offered by the organization and increase organizational revenue.
The easiest method of increasing organizational revenue is through partnerships. Service providers and like-minded brands often provide referrals. For example, online mailing, hosting, and other service providers often connect with another small business owner through online and offline events.
Partnerships benefit both organizations mutually. They boost organizational credibility, trust, branding, revenue, etc. Businesses that find it difficult to find partners can attain financial help through business loan.
On the other hand, businesses can generate higher revenue by partnering with a similar organization to develop a product or service. At times, certain resources of an organization have cheaper costs than others. Therefore, it can help to lower costs and increase monthly savings.
● Subscription Services
Many organizations charge monthly, quarterly, and yearly subscription fees for their blogs, articles, videos, news, etc. According to a source, FT charged £80 for providing access to the digital technology section a few years ago.
Similarly, many newspaper companies have developed a model of providing access to more than three articles at certain costs. Likewise, websites offering e-learning, magazine, blog, book, online courses, templates, photographs, etc., also offer different subscriptions.
On the other hand, companies can even offer offline subscriptions for magazines, newsletters, and other similar offerings. Such a practice is often referred to as a freemium model wherein the audience attains limited downloads or viewership.
● Online Courses
Business owners can benefit by offering online courses on different aspects of their fields. A video course also helps influence the market, enhance branding and reachability, and increase credibility.
Moreover, a video course would help to train people interested in the respective fields. Therefore, such individuals can gain knowledge and apply for a job in the same organization. As a result, companies can save immense amounts spend on training employees.
Besides this, companies can even provide these courses to their existing workforce at no cost. Companies can even provide courses related to the offered services and products.
For example, a digital marketing company can offer email marketing, PPC, Google Analytics, SEO, SMM, Ecommerce, etc., courses. Similarly, a company specializing in AI can provide courses on Data Science, Building AI, Machine Learning, etc.
● Renting and Sub-contracting
Many prominent organizations rent spaces such as parking lots and unutilized desks. Moreover, companies often recruit employees that work partially at the office and on the field. Therefore, an unutilized desk can also incur revenue by offering it for use.
Such circumstance becomes possible in coworking environments. Besides this, they even rent office equipment to other businesses. By doing so, new small businesses and startups can attain significant initial capital that can substitute a few expenses.
Additionally, companies can rent spaces during their non-working days unless the landlord prohibits it. Business owners who don’t have this option can use long term loans with no guarantor to resolve financial issues and receive a significant capital boost.
Many businesses have also sublet their spaces during the pandemic to manage the business during the slowdown. According to a source, many restaurants inculcated services for delivery and meal services.
Besides these new stream methods, companies can even launch new products and services, add more USPs, etc. It can also monetize a blog, take advertising fees, increase prices, incorporate brokerage services, offer legal and financial aid, consult, etc.