In the journey of every successful company there are opportunities that present themselves and decisions that need to be made. A new revenue stream presents itself and their eyes light up. Hold on though, this stream is outside of your core business and will require time, resources, and development. Do you take on this new project? Or do you put your head down and continue doing what you’re the best at, what has proven to be successful and profitable?
It’s a tough choice. On one hand, you want to continue growing your business and always reaching for more. But on the other, you’re taking on a risk that could distract you from your core business. The severity of that risk is why you should not be afraid of, rather you should embrace, an outside firm to supplement the skill set of your in-house team, especially if the opportunity is an arms-length away from your core business, complimenting, not contrasting it.
An outside firm, easily found on the web or even better on events like TES Affiliate Conference, will mitigate the stress of dedicating that valuable time and development to a secondary revenue stream but you have to depend on them to deliver results with autonomy. They’re specialists, after all. As long as you can verify the results on a regular basis you should trust in their experience and expertise. It takes a load off your plate because any new revenue stream is going to require multiple touchpoints to get off the ground and flowing. With an outside firm, you manage one relationship and let them handle the rest. Couple that with large, yet attainable, performance-based goals and you have a firm motivated to reach audacious numbers on your behalf.
Always start with shooting a bullet- choose a small test or sub-set of the larger picture, conduct the test, review the results and then when satisfied, shoot a cannonball for much larger results and impact. Always have verification mechanisms in place so you can be sure of the expected results. Once a run-rate has been established, have them create a forecast so the business can develop expectations of results from the relationship. Again, track this- more frequently in the early going- then monthly moving forward. Always verify.
This new relationship, like all relationships, is built on trust and delivering on expectations. For that matter you should always choose one firm for a new revenue stream. Choosing more than one firm will dilute their efforts as you are introducing competition into the equation. The only objective should be to meet & exceed your results; having more than one player may damage long-term expectations as competition affects the market dynamics by having too much supply or access to the open market.
A revenue-share model is a great way to have both parties aligned on the same goals. Everyone wins, and all cards are on the table – transparency is key in building trust and trust is always a part of great business relationships. Fixed rates kill the upside and block transparency to the data and results.
On the inside, you stay high level and always down look with a birds’ eye view. Stay focused on the results and not the “how,” that’s the outside firm’s responsibility. The worst thing you could do is lose faith in their autonomy and dive into ground level tasks with them. That creates a duplication of effort and takes you away from your own specialties. Outside firms provide a myriad of skills and, as long as any additional revenue streams don’t veer too far away from your company principles, they can be utilized to great success.
