Aim For “Income Diversity”

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by Tom Watson on April 15, 2011

You must be wondering what the heck do I mean by that headline. What is income diversity?

This in essence means you should be aiming for all types of income sources to keep your cleaning business busy.

Now how would you do that? Well…consider this example. Think of your cleaning business as a mighty river. Let’s say it’s the Mississippi River for arguments sake.

What makes that river so great is the fact that so many smaller streams run into it. Each tributary that feeds into the river makes the main branch stronger.

What’s a river got to do with a cleaning business? Well… a well run cleaning business usually has a bunch of income sources (AKA “smaller streams”) running into it. This builds on the main source of income, making it even greater.

Relying on just one method could get you in trouble if that particular method dried up for some reason. This means you should try to not only get a bunch of what I call the “bread and butter” accounts (5 day per week cleaning jobs), but also some “one time job” type customers.

These one time jobs can really help smooth out any rough stretches you encounter when your regular customers are late in paying you. While most accounts will pay on time, some won’t.

Now once you factor in Murphy’s Law (if something can go wrong it will), you’ll soon realize that your big accounts will sometimes pay you late all in the SAME MONTH. This can create a cash crunch, which is no fun.

Cash crunches are normally short term, but they can make your blood pressure rise when they happen. I have three main ways with dealing with this issue.

  1. Have a collection of BOTH large and small accounts (smaller accounts usually pay on-time while large accounts tend to run late).
  2. Income diversity (what this post is about).
  3. Emergency bank fund (always a good idea to stockpile some cash for tight stretches).

Income diversity not only helps you when your regular customers are late paying you, it can super charge your bank statement too. Now why is that?

While the bread and butter accounts make your business run and pay the bills, the one time jobs are like bonus money from the heavens. What constitutes one time jobs? This could be almost anything.

For my business I spend a lot of time cultivating sources in the Real Estate trade. I particularly like focusing on the foreclosed housing market. These properties are very lucrative for a cleaning company to shoot for, and I recommend it highly.

Another benefit of the Real Estate trade is simply cleaning homes either before or after a home is sold. Again…this also very profitable, not to mention an easy job to clean.

To put this in perspective, this week alone my company brought in over $1,000 just from the Real Estate angle. There was no cost to obtain this business, as our pre-existing contact base CALLED US.

Like I said earlier, this is both bonus money and insurance against some of our regular customers being late in making their payments. Currently I have a few customers who are late, so the money helps offset that money to an extent.

The nice part is once that money that is late comes in, the bonus money goes straight to my pocket essentially. Quite a nice deal I must say. So like I said earlier…aim for income diversity.

Work at developing “other” income sources to supplement your regular accounts and you’ll not only be playing it smart, you’ll put a lot of bonus money in your pocket too.

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