Ep. 10: Building Revenue Streams
After a small hiatus, Barbs is BACK and better than ever with episode 10! This one's all about building revenue streams, so if you like making money, take extra notes…or don’t! We did that part for you!
THE SHOW NOTES
Why is building revenue streams so important to a small business? In episode 10 Kristen shares here thoughts based on her experience as a business owner the last 6 years. “For me, the alternate streams of revenue I set up early on, that have since morphed and changed into other revenue streams, are what allowed me flexibility in being able to select the direction that I wanted my business to go,” she says.
In thinking about your business and other revenue streams, make sure you still keep the “main function” (or bread and butter), the main thing. For us, interior design is our main function and always will be! It’s what we base everything off of from a branding, marketing and numbers standpoint; and then we have the brick + mortar, online shop and airbnb (and for a while we did flips and investment properties) because over time the company has pivoted (if you know, you know) and morphed into being those things also. In creative businesses, it’s easy to forget to keep the main thing the main thing, but it’s important to not let your “side hustles” outshine your main function not matter how much growth happens along your business journey.
As you probably know by now, THE LifeStyled COMPANY started as a blog, with its primary intention being to get interior design clients, because Kristen wanted to tap into and style all aspects of your life. Around the same time though, Kristen started an Etsy shop selling printables while she was also still working her full time job as a wedding coordinator and blogging. While the Etsy shop grew and changed, she started creating wedding invites and seating charts along with printables, and was able to save enough money to make LCo her full time gig! “I made $16k the first year, $21k the 2nd, $21k the 3rd and then $11k the 4th year. There was definitely a peak in the middle and for a small business, the revenue made was a lot of money! This alternate stream of revenue provided me flexibility and peace of mind, and it allowed me to have the confidence in taking risks for my main function. All that said though, I never let it with or get in the way of my main function,” Kristen says. Now, she’s not saying you need to drop everything and start an Etsy shop because back then Etsy was new-ish and all the traffic was organic. Now the landscape has changed and you have to pay to play, so maybe now it isn’t the vehicle to have an alternate stream of revenue, but back then the timing was right and it worked for Kristen.
A LITTLE WORD ON HOUSE FLIPPING
House flipping - it’s really hard. It was envisioned to be another stream of revenue so Kristen could let weddings go for good. Kristen talks about how the projects her and Vince did were “good-ish” - they made between $10-$30k per project, but then got sued so now it’s like we didn’t make anything (she talked about this in episode 8!). “It was worth it because we gained so much knowledge and it taught me a lot about builds and managing trades and subcontractors,” says Kristen.
This market is also super saturated and pretty cut throat. Not only is the housing market a wild card in general, but when you have homes that are not great going for top dollar, and homes that are stunning going for top dollar, there’s not much wiggle room for flippers to break into the market anymore.
THE STORY ON THE LCO SHOP
Between house flip projects, Kristen knew she wanted to get into retail and open a boutique, but it’s a huge undertaking and at the time she didn’t have much bandwidth left. Once she stopped flipping, she went to her first market with her mom and while she was really excited about the potential of an LCo retail shop, she wanted to test it out before she signed a 3-5 year lease. She came up with the concept of a pop up shop, and in April 2016 she rented a space for $3000 for the month. “We announced it and did the pop up for a week. In typical Barbara fashion I couldn’t half ass it. I invested so much money, time and effort and at that point we hadn’t installed a retail location before (1500 square feet of furniture in a house is a lot different than 1500 square feet furniture in a retail space!).”
The team pulled out all the stops and installed the space in 2 days! It was wildly successful, they walked away with $15k of profit in a week, balls to the walls busy and Kristen says it was the first pinch me moment she’s had after seeing all the support! This experience allowed Kristen to get a taste of retail and it was great, but she knew she couldn’t do it to that level forever because she was frankly exhausted. BUT (there’s always a but!) after she thought that would be the end of the retail shop conversation, but after she saw the demand she came up with the shop concept that we have, and the rest is history! Our brick and mortar is located in downtown Gilbert, AZ and just like our company, it’s changed so much from the first merchandising set. Overall the shop is more streamlined and brand identifiable; we introduced clothing, shoes and accessories, and launched an online store (which is a whole other beast and separate business), and all of these “pivots” were all trying to build additional streams of revenue so we could have choices.
You can’t be an expert in a million things and a sure fire way to let your network know that you’re all over the place, is to be all over the place. “If you’re trying to build a profitable business as an entrepreneur, whether or not you want it to be just you or grow into something larger, you need to pick a theme and stay in your lane - for me it was design,” she says. “From printables to weddings to homes, it was always design. You have to pick and choose!”
The more you dumb down your experiments and efforts, the more lost you’re going to be, which as an entrepreneur is not the place to be. Additional streams of revenue are important and vital to a business so that you don’t put everything on your shoulders and all eggs in one basket; that can be a slippery slope and a scary situation, so give yourself a buffer for those “just in case” moments.