There’s a reason diversification is an important part of financial health — whether we're talking about your investment portfolio or your business, putting all your eggs in one basket is a big risk. 

For small business owners, diversifying your revenue streams can help you balance out seasonal lulls or unexpected headwinds. According to research from U.S. Bank and the National Federation of Independent Businesses, 82% of small businesses fail due to cash flow issues. Diversifying your revenue streams can help shore up stability and growth. Here are seven potential ways to do it.

1. Enter new markets

Your current target demographic doesn’t have to be your business’s only source of income. One way to generate more revenue is to cast a wider net. The goal is to get in front of other audiences. Let’s say you offer consumer-facing business solutions. Perhaps you expand your offerings to appeal to other businesses. Or, if your business’s main source of revenue comes from millennials, maybe you adjust your marketing strategy to appeal to older consumers.

You can also enter new markets by expanding your products or services into new locations, including digital offerings.

2. Add a subscription service

If your business has a loyal following, you could carve a new income stream out of subscriptions and memberships. This is when you create a new program or offering that’s only available to those who pay for specialty access. A monthly subscription can unlock premium content, products, services and savings opportunities. You can make this a tiered structure with different subscription levels. The point is to offer value so customers feel that the monthly fee is worth it. If they do, it can build customer loyalty and make them more likely to recommend it to a friend. 

3. Explore partnerships 

When it comes to building new revenue streams, you don’t have to go it alone. Chances are that other small business owners have the same goal. Teaming up with another entrepreneur in your industry can help boost your income. That might mean:

• Doing a joint social media marketing campaign together 
• Promoting each other’s products and services online via your websites, social media accounts and email newsletters
• Hosting a joint event, either virtually or in person

Partnerships can instantly expand your audience of potential customers. Take a closer look at your professional network to see who might make a good collaborator. 

4. Consider new product or service lines

There’s no reason your business has to continue doing the same old thing it’s always done. Introducing new products or service lines can lay the groundwork for new revenue streams. This will likely require an upfront investment. It’s wise to run a cost-benefit analysis before moving forward to make sure the costs are worth it. 

When deciding what new offerings to bring to the table, your customers could be a valuable resource. You can use social media or email to ask them what they’d love to see from you. What are their pain points — and how can your business help solve them?

5. Host events 

Another way to drum up revenue is to create buzz around events. These can be hosted in person or virtually and may include:

• Workshops or courses
• Private group services or experiences 
• Events that are specific to your local community or customer base

What matters most is incentivizing the event. Why would your customers want to attend? Depending on the event, you can charge an entry fee or make it free in the hopes that attendees will be inspired to make a purchase. 

6. Rent out your space

If you operate out of a brick-and-mortar location, you might be able to use your space to generate recurring income. For example, you could rent out your retail shop for weekly open mic nights or offer your conference room for local events that take place after business hours. You can also turn available parking spaces into passive income. Think outside the box about alternative uses for your business space. If you’re renting, you may want to run it by your landlord first.

7. Look into sponsored blog posts

A strong marketing plan is critical for small businesses. Digital marketing is becoming an increasingly important part of the equation — and it goes beyond just paying for social media ads. Content marketing can be an income-generating tool. If your business has a blog, you can use that to write compelling content that:

• Is SEO-friendly and ranks well on Google
• Is helpful to existing and potential customers 
• Supports your sales goals 

Sponsored content is when another business pays for a blog post on your site. These should be businesses that offer products or services that are relevant to your customers. Sponsored posts can be helpful and valuable while driving traffic to the paying business’s website. 

Most small business owners are always looking for ways to boost their income. Diversifying your revenue streams with some or all of these strategies can set the stage for stability and steady growth.