When you’re looking for ways to work from home or build your own business, you’ll probably come across the idea of diversification. This is something that many work-at-home advocates say is important for your success, but what does diversifying your income really mean and how does it fit into your own work-from-home plans?
I’ve found that diversification is an important facet of my own work-from-home business, and it’s one that everyone aspiring to work remotely needs to understand. Here’s what you need to know about diversification and working from home.
What Is Diversification?
Essentially, diversification in this context means that you have more than one way of making money from home.
This could look like any number of things, especially when you’re working for yourself. Let’s look at an example. Say you wanted to work from home by starting your own blog and monetizing it. There are several ways to diversify in monetizing your blog, and you probably aren’t going to pick just one strategy and do nothing else. There’s ad revenue and affiliate revenue, for starters. You could diversify further by selling your own products on your blog. And then you might move into self-publishing a book on Amazon. Plus, you might find that there are some great opportunities for you as a freelance writer, blogger for hire, or even virtual assistant. And once you’ve got blogging down pat, it might be time to start up a second blog — giving you a whole new source of income. Each one of these opportunities gives you greater diversification.
But it doesn’t just stop there. For every “new arena” you branch into, you can diversify even further. If you’re selling products on your own blog, the sky is the limit. You might put together some printables, a workbook or guide to something you teach on your blog, a bundle of graphics or images, or even some handmade goods. You might also branch into selling courses or training programs — further diversification, with no real limit to what you can offer. The more “types” of things you sell, the more you’ve diversified there.
If you venture into offering services in addition to monetizing your blog, you’ve got another opportunity to diversify. Freelance writing is one service, but it comes with a huge range of options, from blogging for businesses to writing website copy to drafting press releases and more.
Similarly, if you crack the door open on doing virtual assistance, you’ve got a huge opportunity to diversify. You might specialize in email management or social media management, but you could offer any number of services, from data entry to editing to SEO in WordPress. There’s no limit to what businesses and entrepreneurs are willing to “hire out” and if there’s any aspect of working online that you’ve mastered or that you enjoy, you can start offering that service. The more of these services you offer, the more diversified you are.
One note of caution, however: be careful not to spread yourself too thin or diversify too fast. It’s better to get really strong in just one or two areas before moving into another one than it is to come out of the gate offering everything under the sun and not having the chance to master in any of them. If you aren’t ready to niche down into a particular subset of services, consider an industry niche instead (like being an all-around VA just for bloggers or a healthcare writer-of-all-things).
What About Telecommuting?
If you’re working for a traditional company in a telecommute position, diversification looks a little different for you. No matter what, it’s always smart to broaden your horizons in any job and pick up extra skills along the way. This makes you more valuable as an employee and gives the impression that you’re invested in the company, not just the job. Managers like to see that kind of drive in their employees, and that might mean you’ve opened a few doors for yourself when it comes to promotions and higher pay.
Don’t forget to take a look at what your HR department offers. It’s entirely possible that there are programs and funding available to offer you extra training or education at reduced or even no cost to you. Make a case to your boss about how valuable it would be for you to take a specific software training or to attend an industry conference, and see what happens!
Another thing to think about if you’re employed in a more traditional role (even if it’s in a non-traditional setup) is the benefit of diversifying your income sources, so that your main job isn’t your only income. What I’m getting at here is the side gig, something that’s become almost a mainstay for anyone who wants to work from home. This will allow you to tap into the benefits of diversifying without having to give up the stable income you’re already earning, and it means you’ll have some protection against having nothing if the worst should happen and you lose your main job.
There are a few ways you can go about creating a second income depending on your skills, interests and time available:
- If you are only working part-time, you can simply pick up another part-time work-at-home job. This gives you a little safety net should one company go away or cut their remote staff. If you don’t need the money right now, you can save it away for an emergency – something we should all be doing a little more of.
- Maybe you can consider something a little more passive. Even if you’re not a blogger, there is no reason you can’t write an eBook, put it up on Amazon and wait for the royalties to come in.
- Perhaps you’re a gal who loves a great deal. If you spend your weekends scouting the garage sales around time, consider flipping a few of those items on eBay or Amazon.
- It won’t make you rich, but you may be able to pick up a few hours per week as a website tester or search engine evaluator.
- You could go a more passive income route by investing in peer-to-peer lending or REITs.
Benefits of Diversifying
The real benefit of diversifying is that you never have too many eggs in one basket. If you’re a freelance writer and 90% of your income comes from one client, you could be in trouble if that client ever cuts your contract or drops you completely. Likewise, if you’ve got a blog or an Etsy store and 90% of your traffic comes from just one traffic source (like Facebook or Google), your business is in jeopardy because just one little change in that source’s algorithm could cut you off at the knees.
Diversification protects you from being overly dependent on one source of income, but it also shows you how to be the best at whatever you choose to do. When you’ve diversified, you have hands-on experience with a wider range of tasks and experiences. The more you do these things, the more you’ll understand not only what you enjoy, but where you perform the best. Many people have set out to do one thing primarily, but over time they realized that they’re better at something else. Having the ability to test different ways of earning money and choosing the ones that work best for you gives you a ton of freedom in the long run… not to mention a much more stable income outlook than if you relied on just one source.
So that’s diversification in a nutshell. Let me know in the comments if you have any questions!