StartupNation

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• 5 Mistakes Derailing Startup Founders
• WJR Business Beat: The Yat Is the Newest Digital Asset (Episode 368)
• Supercharge Your Professional Networking Through Podcasting
• Business Therapy Evaluates the Human Side of Your Business
• How Blindster’s Kyle Cox Started From Scratch With a Strong Customer Focus 
• Why Diversifying Your Income Provides More Opportunities in the Long Run

5 Mistakes Derailing Startup Founders Posted: 24 Feb 2022 09:00 PM PST Your startup idea is your golden child – and it should be. But keep blind enthusiasm in check and move forward strategically and realistically to avoid the mistakes that can derail your project. You know that feeling when an idea is so good it wakes you up? You fumble around in the dark for your phone to jot memorable notes. Fast-forward to the afternoon when you pull up your overnight notes and have no idea why you thought renaming your company Chumbawamba was mission-critical. Sometimes when you're in the zone as a founder, a case of the twisties can utterly derail progress. After 20 years in the business, I've seen great ideas become billion-dollar businesses and great ideas fall face-first on the doorjamb. As a consultant to many of the world's most innovative global brands as well as motivated founders looking for a jump-start, it's important to be able to know what steps along the way are absolutely necessary and which ones are nice to have. I often tell prospective entrepreneurs: If you have the ability to do anything else – I mean anything – you should do it. Being an entrepreneur can be the hardest, most thankless job you will ever have. If you're motivated by money, don't be an entrepreneur. Work in finance. If you want respect, forget your idea and start climbing the corporate ladder. But if you believe so strongly in your idea that it wakes you up at night and your drive is too passionate for any manager to tolerate, then it's time to think bigger. The top 5 mistakes founders make right before burning their startup to the ground: Waiting too long to launch As the saying goes, if you’re not embarrassed by your first product, you waited too long to launch. OK, so you don't have to be embarrassed when you launch, but after you're wildly successful and looking back, your launch product should make you cringe. Arriving at a minimum viable product or MVP is torture for founders. There's nothing worse than having to trim down your product's features before the big reveal. It feels like each feature must work in harmony for users to get it, right? Let's deconstruct that thinking First, MVPs are necessary. If you believe otherwise, you're wrong – iteration shapes innovation. Before you spend money (or more importantly, your time) on a big idea that made a lot of sense in your dream, it's important to first prove your theories. If you skip the MVP and go straight to version 1, you're not saving time, you're actually spending unnecessary time shoring up a bloated infrastructure for scale that will likely need to be ripped out very soon. Consider the MVP pyramid of doom ​If you stack all of the critical features of your business into a pyramid, as the founder, you need to decide what's critical for launch and what's not. Building out the entire pyramid unfortunately isn't an option. So, it's up to you to decide what portion of the pyramid to build before your initial launch and what can come later. Many founders mistakenly believe that in order to be successful, the key features need to be entirely built out along with as much added polish as necessary – leaving some lesser features completely untouched. Instead, consider taking a bite off the side of that delicious startup pyramid sandwich, building out enough of each critical feature for users and investors to taste the full flavor profile of your new startup, and — more importantly — giving you data to learn and adapt from. You can't experience the magic of an In-N-Out burger by just eating the bun, right? It makes perfect sense that you're looking for TechCrunch press and hoping to ride high on Reddit or ProductHunt, but that's never how it starts. Be realistic. Consider instead a soft launch of your earliest concept with your friends and family followed by outreach beyond your circle to users you don't know. Your friends and family will be proud of you, they'll tell you what you want to hear, but the real insights come from people you don't know. Also, consider spending some ad dollars to A/B test some calls to action or even assembling a paid focus group to quickly bang on your MVP theories. These two examples will get you unbiased, target audience feedback. If you weren't wrong about some of the theories that shaped your idea, then you're not testing the right concepts. Make assumptions, test them, iterate quickly, and think of launch as an evolving process, not a hard date on a calendar. Waiting on the perfect cofounder Just like trying to build too many features at launch, waiting on the perfect cofounder is another one-way ticket to startup purgatory. Founders need to move quickly and the perfect partner isn't always in plain sight. It can be overwhelming and frustrating to essentially be on the clock to find someone to marry without getting a chance to date, but sometimes shopping around for the perfect partner to trust your company with can be a massive time sink. Meanwhile, as you're busy swiping left, Danny Boy and his Whiskey Drink just beat you to market. What's an alternative? Launching a tech company in 2021, you need a tech partner. The internet is fickle and she can be a mean, mean girl. Browsers and devices constantly change and although everything was fire today, your app could very well be on fire tomorrow. Launching without a trusted tech partner to extinguish emergencies is a nonstarter. If finding an individual doesn't make sense right now, then it's time to turn to a consultant or agency for help. Keep in mind, agency engagements are typically structured around project deliverables, while others will also help you get to market and acquire customers. Others go beyond the short-term engagement and also help you hire the best people in the right places. If you find yourself three or four months in and still don't have your tech partner, it's time to call an audible. Way back in 2014, an aspiring entrepreneur came to us with an idea for SMS customer support as a service. He was fresh off a corporate job and wanted to fast-track his MVP. After polishing the idea and unsuccessfully shopping around for a technical cofounder, he hired our team to design and build out the MVP. That prototype (and his incredible energy) got him in the door for demos with some pretty incredible companies for a newborn startup. After some initial feedback and interest, he was able to raise venture capital money and build out additional features and integrations. Over the next several years, his team grew significantly, but our external agency remained his innovation partner, building new feature after new feature while his growing internal team managed the infrastructure. After 25 million customer support text messages between brands and their customers, Teckst was acquired without ever finding that elusive technical cofounder. Related: 5 Strategies to Turn Around a Product Launch That Isn't Working Hiring consultants in the wrong places A wrong hire or bad hire can be an expensive mistake in both dollars and time. Especially in the beginning, it makes sense to cut costs and increase efficiencies where you can. But it's important to strike a balance between building a great team of employees and bringing on an outside firm to complete tasks quickly. So how do you know what you should hire out and what you should hire in? A general rule of thumb is to keep your core business in-house and outsource the pieces that will help you launch and learn more quickly. If you're an automotive brand, your industrial designers and engineers should be in-house since your core business rides on the quality of their work. However, your automotive brand's logo and new companion mobile app should be driven by experts in usability and interface design, not the career automotive lady designing your firmware. There's a really good chance your startup doesn't yet need a dedicated branding agency. There's also a really good chance you're not ready for bleeding-edge video production. And if you're a founder and someone talked you into business consulting to help you shape your idea before you've launched, you're in too deep, man. Too deep. Take a beat and instead consider a versatile digital partner with a focus in the areas you need most with decent enough chops to efficiently cover the rest of your bases. This will ensure you have consistent coverage across-the-board as your brand comes to life and, meanwhile, will keep you sane as you shape the business. When you're trying to get to market quickly, failing fast and often, look for versatile consultants with demonstrated experience that can elevate and complement your unique industry experience. Don’t fall for high-priced specialist consultants working independently. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here Spending too much on lawyers Another expensive mistake I made exactly once was spending too much money on lawyers when building a startup. When you come straight from a corporate job and think it makes sense to hire a big law firm to help you form your new company, think again. Unless your business operation already has significant assets to protect, it's probably too early to hire a law firm with an ampersand in the name. Incorporation can be done easily online and don't even think about paying a lawyer to write your terms and conditions or privacy policy until you're ready to launch. When it comes to most startups, you have the opportunity to launch with some basic personal and professional protections to shore up any gaps as you gain traction. Be sure to incorporate. Check out your competitors' terms and privacy policy to help put some basic stakes in the ground, make sure you cover the basics, and then spend the rest of your early time and money actually getting to market. If you're lucky, your investors might even cover the cost of a more sweeping legal review once you have business assets to protect. There are a lot of new privacy laws to consider if you're primarily doing online business in the European Union or California. However, until you have tens of thousands of users, you're likely in the clear for CCPA (California Consumer Privacy Act,) and GDPR (General Data Protection Regulation), but depending on your own unique business and location, you may want to consult an attorney on this one. In general, if you catch yourself spending more dollars on lawyers than you have active users, you're probably spinning your wheels. Competitive analysis paralysis It's the user experience designer's ultimate kryptonite. Writers suffer writer's block, designers hit a creative wall, and founders get analysis paralysis. No matter your industry, it can be easy to overanalyze your product or overthink your place in the market, stalling you from innovating and generating unique ideas to move your company forward. Instead, do the research and networking your industry might require, but don’t ignore the value of bringing some ignorance to the table, as that can sometimes shift to courage. We had a client who insisted on iterating behind closed doors for months, which soon became years, before ever testing their concept with real users. After an initial rush to build out the platform, more and more features kept getting added to our scope and soon we realized it was our client trying to keep pace with their assumed competition – fearing a launch with fewer features wouldn't make the splash they wanted. This is an ill-fated (and expensive) startup journey to travel. It all comes down to the build-measure-learn feedback loop, and all successful startups have this mastered. Seeing what customers actually do with a product is much more valuable than asking them what they might do. Walking this line of "just enough" can be tricky and the pitfall lies in both under- or overdeveloping your product. By now, you probably have a good idea of what your competitors are doing. Don't overthink it. Once you have your angle that makes your approach better than the rest, run with it, don't obsess over your competitors' Google Alerts. Be aware, but not obsessed – if you're constantly trying to pivot to set yourself apart, you'll end up in a barren land far from the eye-opening idea that lit your fire. Originally published Sept. 22, 2021. The post 5 Mistakes Derailing Startup Founders appeared first on StartupNation.

WJR Business Beat: The Yat Is the Newest Digital Asset (Episode 368) Posted: 24 Feb 2022 10:28 AM PST On today’s Business Beat, Jeff Sloan explains the latest trend in the digital world: Yats. These one- to five-emoji strings can be used as a digital username and more. Turn in to the Business Beat, below, to learn more about yats:   Tune in to News/Talk 760 AM WJR weekday mornings at 7:11 a.m. for the WJR Business Beat. Listeners outside of the Detroit area can listen live HERE.   Are you an entrepreneur with a great story to share? If so, contact us at editor@startupnation.com and we'll feature you on an upcoming segment of the WJR Business Beat!   WJR Business Beat Transcript Good morning, Paul. Well, business in the digital world is going crazy. And we mean way beyond just buying and selling online. We mean Bitcoin cryptocurrencies, the metaverse and then NFTs. But now along comes the yat? What in the world? That’s right, a yat. What’s a yat, you might reasonably ask? Well, it’s a string of between one and five emojis that can be used as your digital username when strung together. You can also use it as a website URL and/or a payment address for your personal digital wallet. And people are paying big money for them, Paul. Now, I know. Stick with me here. In simple terms, a yat lets you use emojis as your universal username and identity on the Internet and that’s why they’re so valuable. Now, a Nashville-based startup by the same name, that’s yat, has this to say. They indicate that they’ve already sold 160,000 of these yats worth a combined $20 million. Now one of these one- to five-character yats can cost anywhere from $4 to hundreds of thousands of dollars to purchase initially. And typically the shorter and more memorable the combination, the higher the price of the yat. The most expensive yat was the single character of a golden key, get ready, which sold for $425,000 at the Yat Destiny auction in mid 2021. Having trouble grasping all of this? Well, just like with NFTs, many notable celebrity investors, including Paris Hilton and Kesha, for example, are big investors in yats and no doubt this is influencing others to get on board. And so with all these newfangled businesses selling digital assets, like NFTs and yats and even virtual property in the metaverse now selling for millions, it’s certainly eye-opening and even admittedly a bit hard to grasp for those of us in our region where we’re used to selling things that are made of steel and glass and rubber and have true utility, as in something you can drive to go somewhere. But look, here’s the thing. This also opens our minds to the amazingly tantalizing new array of business opportunities emerging, which are driving billions of dollars in transactions. I’m Jeff Sloan, founder and CEO of startupnation.com and that’s today’s Business Beat on the Great Voice to the Great Lakes, WJR. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here. The post WJR Business Beat: The Yat Is the Newest Digital Asset (Episode 368) appeared first on StartupNation.

Supercharge Your Professional Networking Through Podcasting Posted: 23 Feb 2022 09:00 PM PST Networking has never been easy, and the transformation of the business landscape over the past few years has made it even more challenging. While sending cold emails and LinkedIn “connect with me” might work from time to time, podcasting has emerged as a powerful way to network with other professionals and industry influencers. Podcasting is much more than a content marketing tool or an educational resource for business professionals. If done correctly, networking through podcasting can have a lasting impact on your professional success. Here are a few things you can do to boost your professional networking through podcasting. Be accommodating and considerate If you’re just starting out, you might be tempted to only invite well-known guests to your show so that you can expand your following faster. While this is understandable, the best approach is treating your guests with courtesy while also providing valuable information to your listeners. Before the interview, do preliminary research about your interviewee. However, be careful, as too much research will make your interview sound stilted. If you fail to do enough research, you may appear impolite and inconsiderate. Provide a list of questions to your guest ahead of time, but allow some freedom during the interview. If you’re recording in person, take a seat next to your guest, offer them a drink and introduce yourself. Listen intently to your guests and allow a few moments of dead air to let them catch their breath. After all, you don’t want your guest to leave feeling exhausted from the interview. This also allows you and your listeners to digest what your guest has said. Everything You Need to Know About Starting a Podcast Build strong rapport If you’re podcasting to build your network, the most vital portions of the interaction come before and after the interview itself. Only start recording once you and your guest are fully comfortable with each other. A lot of times, if you begin recording right when the call starts, the guest can be distracted and feel pressured to not be fully open with their story. As a longtime podcaster myself, I've been known to overdue this at times. Occasionally a guest will tell me to start recording because the conversation is already too good, like when I was exchanging some lively pre-interview banter with New York Times best seller Nicole Lapin and she said, "I'm ready for the main event!" Ensure your guest understands why you do what you do, and share your story with them in a vulnerable way. They will be more likely to want to share their story with you and your audience in a vulnerable way, too. After the interview, take a few minutes to thank your guest and share your insights. This can help you find your common interests and provide an opportunity to network. Don’t interrupt Avoid interrupting your guests while they’re speaking, as it can come out as impolite and is usually highly annoying to listeners. Of course, there may be moments when you must interrupt your guest to get the conversation back on track. Your role is to set up the correct questions for your guests and then let them take it from there. If your interviewee expresses something you wish to delve deeper into, jot it down in a notebook and bring it up when they’ve finished speaking. Also, be silent when your guest is speaking. This results in a far better interview, and it helps to build a level of trust and rapport with your guest that can last long after the interview. Give unconditionally Podcasting is not just about the interview itself. If you have done enough research about your guests, you’ll be able to figure out how you can help them. Even if you can’t help them, maybe you have someone in mind that can.  You can offer to support them with your talents in their business ventures (without profiting). You can also simply offer to listen to their ideas and give your opinion. Approaching this connection with the end goal of wanting to form a friendship instead of expecting something in return is the proper way to connect with your guests on a deep level and level up your network. This could be as simple as asking someone "Is there anything I can do to support you?" I remember asking this to Ed Mylett, and he was shocked by the simple question. He said to me, "I don't know how to answer that because nobody ever asks me that." I then came up with a few simple ways to support him, and we have a connection and friendship to this day because of it. By willingly and unconditionally offering your help, you’ll be able to build strong professional relationships that will ultimately come in handy in the future.   StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here   The post Supercharge Your Professional Networking Through Podcasting appeared first on StartupNation.

Business Therapy Evaluates the Human Side of Your Business Posted: 23 Feb 2022 09:00 PM PST Business consulting and coaching have been around a long time. But what are they really? Let's start with a few simple definitions. A business consultant is a professional who provides professional or expert advice in a particular area such as security, management, accounting, law, human resources, marketing/PR, exit planning or any of many other specialized fields related to business. A business coach will assist and guide the business owner in running a business by helping them clarify the vision of their business and how it fits in with their personal goals. Business coaching is a process used to take a business from where it is now to where the business owner wants it to be.  In other words, they hold you accountable to your goals! (After all, life has a way of trying to derail us from our goals, right?) Business therapy is a method for raising personal awareness and creating forward momentum by overcoming personal "stories" and obstacles to gain forward movement. It can ignite the spirit of an organization and bring new levels of personal and organizational accountability, collaboration and excellence. A business therapist evaluates the human side of your business. He or she will help you structure the business relationships of your family members, board members, employees and even customers. So You Want to Be a Business Coach? Here Are 6 Keys to Ensure You Succeed So, what is the big deal? And why does this matter? Because more and more the lines are blurred between personal and professional lives. With more people working from home or in a hybrid environment, traditional models of business structure, leadership and collaboration are being challenged. As a business consultant and coach, I am finding myself being engaged more as a business therapist than a true consultant or coach. (Thank goodness, I have a master’s in counseling!) In years past, I would be engaged as a consultant both internally and externally. Consultants can find themselves working directly in the day-to-day of an organization to determine areas of improvement, redirection or even areas that need to be eliminated.  Consultants also find themselves working externally by looking at an organization from a "30,000 foot-level" and making determinations on improvement, redirection and the like from reports and interviews of leadership and staff. As a coach, I have worked with individual business owners, executives and even teams to keep everyone accountable to goals. I would tweak performance, encourage a frustrated "business athlete" or flat out pull out the coach voice and get them "back on the field" to their best ability. But more and more, I am being asked to help people navigate the unique business relationships that are developing and emerging in the workplace or work/home place. How to Build Great Teams Within Your Startup Business therapy is about people When you engage a consultant or coach for the more traditional mode of therapy, the questions will be all about the people around you. Your spouse or significant other: How is your relationship affected by your work? How are you affected by their career? Are they supportive? Where are the biggest sources of friction in relation to work? What are your "together" career goals?  How do you feel about that? Your children: How is your work affected by your children? What are you biggest concerns for your children in regard to your work? What are your parenting goals and how do those work with your career instead of against it? How are you navigating the season of active parenting with the season of growth in your business or career? Have you even considered this in the framework of work? Your staff: What does leadership look like in a virtual/hybrid model? How has collaboration changed? What does having difficult conversations look like? How are expectations communicated while creating an inclusive culture and work environment that values the whole employee (not just the professional side of the person)? Who do you struggle to lead or work with? Why? Your clients: What do you consider a "difficult" client? How have you worked with more demanding personalities in the past? How do you communicate care through digital mediums with the warmth of a face-to-face meeting? How do you get engagement and buy-in with a client when the pace of business limits the more traditional modes of relationship building? Business therapy is about efficiency Uncovering the "stories" that we unthinkingly have absorbed all our lives can help people unlock potential and capacity. For many people, they have not risen to their fullest potential because they are carrying around false beliefs and expectations from others. Just as in traditional therapy, business therapy can help people "see" what they are believing and change their narratives to be true for their current lives and work. We tend to find more efficient or "faster" paths when we aren't incumbered by the burdens we carry from the thought/beliefs of others.  I have never worked with anyone who was aware they were carrying false beliefs. It was only after asking questions and allowing the business person to verbally explore that I would watch them redefine thoughts and beliefs for themselves. For almost 80% of my clients, they would return for their next session having achieved tremendous progress in business and life. They make quicker and better decisions for themselves and business.  They release ideas, beliefs and, in some cases, bad work relationships. They move forward toward goals because they have energy, mojo and passion again. Efficiency brings speed and speed leads to momentum. Business therapy is about solving problems As any good therapist knows, it isn't about what you think will solve the problem for your client. It is the solutions they come up with. Most people are so focused on the problem that they don't see all the options for solutions. A good business therapist will reframe and question to help them unearth all the options. Most people make the best choices when they are solution focused. However, in an ever-changing business environment with the need for, and consequences of, quick decisions, most people are stressed and not solving problems well. A business therapist can help them navigate the process with structure and allow them to make decisions for themselves quickly. Yes, I still do consultant and coaching. However, taking the time to really understand what a business needs, whether it’s consulting, coaching or therapy, can make the difference in the results gained. You might want to consider all the different tools to get more off-the-couch progress for your out-of-the-box thinking and actions. Sign Up: Receive the StartupNation newsletter! The post Business Therapy Evaluates the Human Side of Your Business appeared first on StartupNation.

How Blindster’s Kyle Cox Started From Scratch With a Strong Customer Focus  Posted: 23 Feb 2022 09:00 PM PST Many entrepreneurs have many beginnings, endings and renewals woven in their stories. The path of any entrepreneur is rarely a straight line. I started Blindster with the firsthand knowledge of the sometimes wayward road self-employment can take and the successes that can present themselves when one least expects it. Striking out on my own  My entrepreneurial path came about after deciding my dream for a career in the NFL was likely to be unfulfilled. I earned a marketing degree from Troy University and then went to work for Black and Decker. Promoted four times in five years, I showed a quick aptitude for business.  After tiring of the corporate grind, I set out to blaze my own trail in 1999 with my first business. With very little knowledge of e-commerce or self-employment, I began the first e-commerce website for custom window treatments.  Sign Up: Receive the StartupNation newsletter! I was based out of my garage. I did it all: I answered customer calls and emails, processed orders, and managed marketing and accounting, but after a few months, I hired my mother to handle the administrative side of the business. The business quickly became a family affair as sales exploded. I eventually hired my wife, brother, sister-in-law, brother-in-law, aunt, uncle and two cousins to help run the business. The venture experienced triple-digit growth over the first few years following its inception.   I eventually ran out of family and friends to hire, but the business kept growing!  In 2005, after growing the business by leaps and bounds, I decided to sell the business to Home Depot.  12 Keys to Family Business Success Starting again The starting and building of a wildly successful business venture can be a crazy ride, one that can quickly put even the strongest of individuals off ever owning a business again. However, after selling my first e-commerce business to Home Depot in 2005, I didn’t wait long. In 2010, after waiting out a noncompete agreement, I launched Blindster, an e-commerce provider of high-quality, custom window treatments. Blindster’s e-commerce approach gives consumers complete control over their window covering purchases. It was a bigger, better approach than my original business.  Once I got the idea to reenter the industry, I started by creating a business plan with the main objective of differentiating myself.  I poured my savings into the new venture, including the earnings from that sale to Home Depot. Even though I had been successful, I still faced the uphill battle of building brand recognition and traffic. At the outset, customer acquisition costs can be high. It takes time and attention to build brand loyalty and retain customers.  It takes risks and persistence to eventually work through the struggles.  Moving up In Blindster’s first year, I spent half a million dollars in pay-per-click advertising. In the company’s first three years, advertising held 40% of the revenue. The business was experiencing something many new companies do, and it was losing money. Having a background in business building, I knew not to panic but attribute this loss to the cost of doing business. By Year 6, Blindster was cash-positive.  I was well aware that in any competitive industry, ad costs will be high to stand strong among giants. The company I had sold to Home Depot became a direct competitor.  One of the most critical aspects of building my business was hiring people I could trust. I kept family in the business, including bringing my mother and sister-in-law back to help build Blindster. After being burned by a developer who didn’t complete his contract, a new developer finally helped get the e-commerce site up and running.  Obsession with customer satisfaction We are obsessed with customer service at Blindster. Customer happiness is greatly valued, and this has led to a lot of repeat business, something atypical of niche products like blinds. I understand that not everyone has the aptitude for measuring, choosing, and installing blinds and other window coverings. Each customer service representative at Blindster goes through extensive product knowledge training.  Blindster offers a unique experience to each customer that sets them apart from other e-commerce sites that offer window coverings.  One of our main selling points is our Fit-or-Free guarantee. This was unheard of when we first started, especially because our blinds are a custom product. This guarantee removed the customer’s concern about measuring incorrectly. The goal is to make customers feel comfortable ordering a custom product online.  A new advertising medium  Another turning point for Blindster was its foray into radio advertising in 2015.  Because we don’t sell impulse-buy products, brand building is more important. We were able to build our brand more cost-effectively through this medium as opposed to pay-per-click.  As social media marketing has become more necessary to build a brand, Blindster has moved into blog collaborations, thought leadership, and podcast participation.  The takeaway Blindster is proof positive that you can always have more than one success story. It took everything I had learned and a dedication to customer satisfaction. With no fear about starting from scratch, I built the No. 1 online retailer for window coverings in the United States.  The post How Blindster’s Kyle Cox Started From Scratch With a Strong Customer Focus  appeared first on StartupNation.

Why Diversifying Your Income Provides More Opportunities in the Long Run Posted: 23 Feb 2022 09:00 PM PST One of the most common reasons people pursue the path of entrepreneurship is to achieve financial security and independence. If the events of the COVID-19 pandemic have taught us anything, it's that anyone — regardless of role, company, industry, or region — can quickly find themselves without a job, and subsequently without a primary source of income. Pandemic aside, other factors such as economic downturns, industry changes or fresh regulations, or even simply a disagreement with leadership can also bring about the loss of a job and the paycheck that comes with it. To add to this, going without a regular and reliable source of income means that our ability to invest and grow wealth for the foreseeable future is all but done away with. Additionally, when we are able to save more money from more than one source of income, our ability to grow wealth becomes much easier and sets us on the path toward reaching financial independence sooner, as it has the ability to open up additional opportunities for us in the future. As such, one of the most important things anyone can do to achieve financial security and freedom is to diversify their income with additional revenue streams. While it may seem easier said than done, diversifying your income has never been easier than it is in today's world. In this post, I want to discuss several ways that you can diversify your income and use it to unlock a greater number of future opportunities. The digital era has countless options Between online shopping platforms that creators can utilize to sell their products, websites such as Upwork and Fiverr, and other independent platforms for freelancers, the Internet abounds with ways to unlock opportunities for diversified income. Whether you're a graphic designer, writer, or even a seasoned and professional business consultant, it's never been easier to advertise your services online and make income from them. The best part? Most websites that allow independent freelancers to advertise their services are free to use. Similarly, because you can decide which projects or clients to take on as an independent freelancer, you can essentially set your own schedule. For those who are unable — or simply don't wish — to give up their 9-5 day job, this means that you can easily plan out your daily or weekly schedule to best suit the demand of work from your side hustle. By diversifying your income in this way, you can also more easily begin building a solo brand and online presence, which is vital to unlocking future opportunities for your professional career. 15 Quotes That Will Motivate You to Start a Side Hustle (and Be a Better Entrepreneur) Diversified income equates to less risk We've all heard the old phrase, "don't put all your eggs in one basket." Though this phrase can be broadly applied to an array of scenarios, it is most true regarding personal finance and income. Just like you shouldn't go all-in on a gamble you weren't sure you were going to win, you shouldn’t place all of your income into one investment in the case that investment turns sour. Allow me to clarify by asking a theoretical question: How did you spend your COVID-19 stimulus checks? If you, like many others, used them immediately to pay off debt or purchase goods, that money likely left your bank account as quickly as it entered it. However, if you managed to invest even a portion of that money into stocks, savings, retirement or other accounts, that money was able to immediately go to work for you by slowly accumulating interest and growth. When you are able to diversify your income, you are simultaneously able to diversify your investments, which is crucial in unlocking additional financial opportunities for you in the future. To put it another way, let me use a hypothetical example: let's imagine that it's 1998. You work a 9-5 office job but make some spare cash selling baked goods to your community, and have managed to save up $1,000 from it. You decide to invest that money in four different companies — Google, Amazon, Apple and Microsoft — by placing $250 in each company. Today, those investments would be worth well over $1 million total in 2021. On the opposite end of this example, if you had invested the entirety of that $1,000 in Blockbuster, this one investment would have been essentially worthless after Blockbuster filed for bankruptcy in 2010. When you are able to diversify your income, you are simultaneously able to diversify your investments, which is crucial in unlocking additional financial opportunities for you in the future. Diversified income protects you against crises Just as diversifying your income can create a less risky revenue stream or investment portfolio, it also helps provide security and stability in the face of potential (or inevitable) crises. The COVID-19 pandemic is just one example of a crisis that forced millions to empty their savings or dip into their retirement or investment portfolios. Other crises, such as unexpected job loss or medical emergencies, are much more common examples of crises that a diversified income can better help protect you against. According to Angela Moore, a certified financial planner and founder of the Modern Money Advisor, a diversified income, "can help provide stability and hedge against income loss due to layoffs, illness, disability, discrimination, and more," in addition to having, "… an incredible impact on your ability to build wealth and/or fund retirement." By diversifying your income, you can become better financially prepared for future crises on top of possessing additional means to save personal funds and invest for retirement. The point is, the more you are able to diversify your income, the easier it is to save and prepare for life's inevitable downswings. The more you can save and prepare for these unexpected caveats, the more opportunities you will have to further diversify and grow your wealth in the future. Verizon Small Business Digital Ready: A free resource for basic business skills, the latest digital technology and more. Gain an advantage during economic downturns Similar to how diversifying your income can better protect you against crises, it also serves as a means to be better prepared for economic downturns, as we saw both during 2009's Great Recession and 2020's COVID-19 pandemic. According to Pew Research Center, almost one-third of U.S. employees either lost their jobs or took pay cuts resulting from the COVID-19 pandemic as of May 2020. A month later, the National Bureau of Economic Research (NBER) officially declared that the U.S. had entered a recession in February 2020. In times such as economic recessions, few others will be spending or investing money as they are more focused on preserving their primary (or, more often, sole) source of income. As such, stock prices tend to dip below average, and many companies and brands tend to offer major discounts on their products or services to keep their own businesses afloat. These provide opportunities for those with diversified income to take advantage of economic downturns, as they are able to invest more money at lower costs, meaning a much higher potential ROI in the long run. Diversified passive income grows wealth while you sleep When we think or talk about "diversified" income, we are primarily discussing two types of income: active and passive. Active income is defined as income that you make from a job working for an employer, or revenue you earn from operating your own business. Passive income, however, is defined as income that provides you with cash flow almost fully autonomously, such as income made from leasing or renting real estate property, creative royalty payments or dividends from investments. Diversifying your income by seeking additional sources of active income — rather than passive income — requires additional commitments in regards to your time, availability, and resources. For instance, working as a ride-share or delivery driver after your 9-5 job still requires you to actively participate in your work to earn extra income, whereas diversifying your income with sources of passive income allows you to maintain your regular source of income while earning extra money at the same time. The only caveat to diversifying your income with sources of passive income is that they tend to require larger monetary investments up front, such as purchasing real estate property or acquiring a fleet of vehicles your side business can use to make more deliveries more quickly. Achieving financial autonomy Overall, the ways by which you decide to diversify your income greatly depend on your unique situation and circumstances. If becoming a driver for Lyft or Uber Eats isn't accessible due to a lack of time, then starting your own digital or online business may be the better option. Likewise, if you don't have the financial resources or capacity to invest in higher-ROI sources of passive income, don't try to bridge the gap by taking out loans or maxing out your credit cards as this can rapidly lead to increased debt or broader personal financial issues. The bottom line is that possessing diversified sources of income is one of the best ways to protect yourself financially, as well as one of the quickest ways to achieve financial security and independence. The commonality in deciding which way(s) you want to diversify your income is that it is a mentality shared almost unanimously by millionaires and billionaires around the world. As a final note, remember that even though "time is money," as they say, your time is the most precious resource you have at your disposal. Your finances are secondary. Diversifying your income without risking or jeopardizing your primary source of income is the truest way to achieving financial independence and unlock additional opportunities in the future to continue growing your personal wealth. StartupNation exclusive discounts and savings on Dell products and accessories: Learn more here.   The post Why Diversifying Your Income Provides More Opportunities in the Long Run appeared first on StartupNation.

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