If we set up our own business, it’s because we want to make a living out of it. And whether you like it or not, that means earning money. During our first steps in the business world, we are obsessed about making money, but one of the mistakes that I have noticed is that very few people know where their money actually comes from. Analysing income streams should be a priority.

We need to know every income stream to get to know what’s working within out businesses and where we should put our efforts (i.e. marketing and business efforts). Let’s see how we can do that and how we can make the most of this simple tip.

How to analyse your income streams

It’s as simple as tracking all the money that comes into your bank account every month. It’s important to know the concept and details of every amount. Every payment must have a reference number that you can relate to its invoice to get to know the services provided. Furthermore, I also keep a spreadsheet with the breakdown of my income each month. It’s very useful, because you can see in a glimpse your month performance and analyse the different income streams. Let’s see an example:

As you can see in the image, we have already identified three different income sources. We can also analyse our expenses, but I’ll leave that for a different blog post!

Now you just have to analyse every stream that generates income. If you just have one income stream, maybe you should consider diversifying your business. It’s always a bit risky to put all your eggs in a basket, right?

Now, we have to know how important each stream is for your business. You can create a graph to analyse it clearly. For example, this would be mine showing my results of last month:

Now we have a clearer image of how our business is performing. But… how can we use this information?

Why is that important?

1. Establish your SMART goals.

If you know exactly what you earn each month and –most importantly- how you earn it, it will be easier for you to set your goals. For example, I normally plan a 10%- 20% earning increase each month.

Bearing this goal in mind, I can plan my strategy and the actions that I’m going to take to achieve this goal. Let see this with an example:

I know that my main income stream relates to my translation and interpreting services. I want to increase my earning by 16% during next month. That means that I will have to translate at least (for example) 10,000 words than usual to achieve this goal. To get these extra 10,000 words, I’ll probably have to close two deals with two different new clients. Let’s say that I want to boost the sales of my legal and marketing translations; then I will have to contact 5 clients marketing-related and another 5 clients working within the legal field each week of the month to get these two new clients.

(Now you know how obsessed I am when it comes to planning, right?)

However, I can say that I’ve been implementing this method and it has always worked for me.

2. To boost the sales of one of your segments.

Have a look at your graph, which segment would do you think you can improve? Depending on your business or even external factors, you can boost and focus on one of your segments.

For example, let’s take as a reference the graph above again. Let’s say it’s Christmas time (external factor), how can I boost my sales to achieve an income increase?

Well, I know that most of my international clients will be willing to translate their marketing materials (Christmas cards to employees and clients, for example) into different languages, some of them will be willing to create some content to wish a prosperous new year to their audience (let’s say a blog post, or a leaflet). Then, I can launch a new offer focused on copywriting, content creation or graphic design services to boost these segments during Christmas.  

3. Multilingual companies… Pay attention!

The same can be applied for multilingual companies that work with different languages. Do you know how much money are you earning from clients speaking different languages?

If you apply this strategy, you’ll be able to analyse your income streams from every languages. With this data, you will be able to take better decisions; for example, you can boost your Spanish content marketing strategy to boost your sales in Spanish speaking countries.

How do you increase your income streams within your business? Would you like to share your strategies with me? Leave a comment below! I’d love to hear from you.

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