, in business since 2002, built a gold-plated reputation for outstanding 3-D graphics cards, power supplies and motherboards for the gaming industry. The company further burnished its reputation by offering clients 24/7 tech support and other perks that appealed to the high-end of the market.
After stabilizing the core business, the company started kicking around ways to diversify. It hit on a computer for gamers in their 20s and 30s because "it became clear that we were a hop and a skip away from providing a high-performance gaming experience," says John Malley, senior director of marketing.
, launched in January, made sense because overhead was low, talent to develop it was already in-house, and perks like concierge tech service fit with the brand's high-end focus. "By differentiating the Phobos line enough by making it super high-end, we have not alienated our customers," he says. "We still provide value to them with hard-to-find graphics cards."
Given the economic downturn, every company is fighting to keep its toehold with customers and staff. Finding new revenue streams not only motivates and retains employees, it helps weather the economic downturn. Here are nine tips on how to find new areas of income:
Leverage your core business:
Too often, you're caught up with issues of daily survival. Take a step back and call a meeting of your top team, especially the sales and marketing people. Ask if the company is focused enough on the right moneymaking products or services. How big a share of the market do you own and what is the potential? How can you further monetize what you're already doing?
Less than a month after launching
, a site for sports fans, founder Ty Ahmad-Taylor realized he needed to diversify because ads weren't going to cover costs. He decided to work with an outside ticket vendor to connect his sports fans with unsold tickets. "I'm an A's fan living in New York City," he says. "It's valuable to me to know when the A's are playing the Yankees and when tickets are sold. We're delivering fans who don't know about this to marketers who don't know how to reach this audience." The service will launch in two weeks.
Be forward thinking:
While you maximize your core business, try to think about where your industry is heading. Are you positioned to take advantage of it?
, a small PR, marketing and communications firm, saw that information consumption was moving away from traditional media. It also noticed that infrastructure was a hot area of interest. In February, with the help of editor Jebediah Reed, the company launched infrastructurist.com, a hyper-vertical micro news site about infrastructure.
With 150,000 monthly visitors and 1,000 followers on Twitter, "we believe it will monetize," says associate publisher Tom Blim. "Traffic is good enough to pay for its expenses. Reputation-wise, we are in the business to create brands and make brands more viable. The ability to create a brand out of ether demonstrates an agility and understanding of the changing market space that competitors can't match." An added bonus: It opens doors to potential new clients, like the Department of Transportation.
In price, that is, without putting up the sales signs. Sometimes the only way to move inventory and capture customers is a deep discount, but that's a short-term revenue fix. Instead, offer cheaper options.
ventured into silver, brass and now pewter after she noticed her gold jewelry designs weren't moving as briskly as they once did. A pewter piece, for example, retails for $400 while a similar gold version would sell for several thousand dollars.
But to ensure that her company's reputation for high-end jewelry remained intact, she uses the same 18K gold or gunmetal finish for all parts of her collection. She also makes sure the more affordable pieces are as well-designed as the more expensive ones.
Another surefire way to lure old and new clients is to offer them the most bang for their buck. If you can, offer promotions like free shipping and gifts with purchases. "You also might find that these in-store promotions bring people in and, in turn, they end up buying more than just the promoted product," says Robert Tuchman, author of "Young Guns: The Fearless Entrepreneur's Guide to Chasing Your Dreams and Breaking Out on Your Own" (AMACOM).
When Divya Gugnani launched the culinary Web site
, she thought the business would make money as an e-commerce site. Users would click to buy food and kitchen products after learning tips from experts like Blue Hill's Dan Barber and The Waverly Inn's John DeLucie. She quickly discovered people didn't buy culinary products often enough to make a viable business. Four months ago, she hit on the idea of finding sponsors for her video and editorial content. For example, when DeLucie revealed the store where he purchases his octopus for his signature Mediterranean Octopus dish, she cut a deal with MYLO Gourmet to sponsor the video.
Listen to your customers:
Top-flight customer service will help you ride out this recession. And sometimes it can help you figure out new business directions. Darrin Clement listened when some clients asked if they could license
data to create their own maps rather than hiring Maponics to make them. Fears that this new revenue stream would cannibalize the old one proved unfounded. As a result, Maponics now counts
Yellow Book USA
Equally important, be careful whom you listen to. After another client asked Maponics to create mapping-related software, Clement thought they would build it and customers would come. He quickly discovered the company wasn't meant to be a software company. "Thank God we didn't do it," says the CEO. "We would have had a bloated infrastructure and probably wouldn't have a market. We said this customer wants it, so we figured there would be many other businesses that fit that profile that would want it too. But they each wanted something different."
Do your research:
Don't rely only on your existing customers to find new revenue streams. With advances in technology today, it's easier than ever to find out who's buying in your industry and target those people, says Tuchman, who is also founder TSE Sports & Entertainment, now a division of Premiere Global Sports. Then cold call them.
Before committing yourself and the whole company to a new product or service, test and retest it. Let the few who believe in the new idea own it and see if they can prove it. Depending upon your business, that could take weeks, maybe even a year. Make sure you have the fortitude to give those you've picked some breathing room before pulling the plug or ramping up.
Have a plan:
Whether you're expanding an existing revenue stream to capture a greater share of the market or embarking on an all-new direction, it's good to have a plan. Tim Ferguson, co-founder of merchant bank
, recommends having a written growth plan. One of the biggest mistakes he sees small businesses make when pursuing new moneymaking ideas is failing to understand how they will fulfill the increase in orders and manage the uptick in customers. Says Ferguson, "You must build capacity in sync" with all those new contracts.
Lan Nguyen is a freelance writer based in New York City. She has written for the New York Daily News, The Wall Street Journal, Worth magazine and Star magazine.