Build Your Financial Future Through Diversification
You’re no longer just a business owner; you’re a leader in your field who is beginning to develop multiple sources of income apart from your primary revenue stream. At Level 7 of the 8 Levels of Performance, it’s time to think beyond transactions and start building a diversified portfolio of revenue streams.
At this level, you’ll create a team of consultants, form important partnerships, begin to acquire new sources of income, and establish yourself as a high-level leader who operates outside of the day-to-day tasks across a diversified portfolio.
Let’s dive into what it means to expand your revenue and how you can build a business that oversees multiple businesses and is designed to thrive in any environment.
What is Expanding Revenue?
"Expanding revenue" simply means leveraging your existing revenue stream to create multiple revenue streams that exist independently and generate their own profits in order to create stability across your portfolio. This is not about taking on more work or stretching yourself thin. Instead, it’s about finding ways to bring in diversified income that supports your business goals and reduces reliance on any single source of revenue.
At Level 7, you're viewing your business as a collection of revenue channels that work together to create a more resilient whole. A coach can help you navigate this shift, offering perspective on the bigger picture and showing you where each new revenue stream can fit into your existing business model without creating unnecessary complications.
Why Diversification is Essential in Real Estate
Diversification is about cementing your long-term wealth and your legacy in this world but it’s also the key to weathering the ups and downs of the market. By building a diversified portfolio of revenue streams, you create a safety net that makes your business less vulnerable to market fluctuations.
For example, imagine if 20% of your income came from rental properties, 10% from property management, and the rest from traditional sales and businesses like mortgage and title companies. If the sales market slows down, you’re still generating revenue from other sources, which means you can afford to keep operations running until the market picks back up.
This is where working with a coach can be incredibly valuable. A coach with experience in business growth can help you identify the best diversification strategies for your market and business style, ensuring each new stream contributes to your overall stability rather than spreading you too thin.
Creating a Team of Consultants
Forming new revenue channels requires more specialized knowledge and management than you can take on alone.
For example, if you’re interested in investing in rental properties, you’ll need to understand financial analysis, property management, and tenant laws. On top of that, you’ll need to have a comprehensive understanding of all your finances and understand how much money you should be putting into what.
You need to build a team of consultants and advisors to guide you in every area. In Think & Grow Rich, Napoleon Hill demonstrates how Henry Ford didn’t need to clutter his mind with general knowledge about everything because he had a row of electric buttons he could press to summon the perfect expert for any situation. Now, you’re in a position to do the same.
Here are some consultants you should look into hiring a:
- Tax advisor
- Wealth advisor
- Business attorney (at least one, who you can rely on)
- Coach who will guide you through the process of establishing additional sources of income
- An ecosystem of business leaders at a similar level who can help steer you in the right direction and make important introductions
A coach in particular will help you identify new business ventures, analyze business valuations, and conduct a cost-benefit analysis so that you know what you’re getting into and can put your full focus on maximizing profits.
One of the biggest benefits of Tom Ferry coaching is the network of top-tier business leaders who come together for life-changing Masterminds and partnered ventures.
How to Diversify Portfolio
Income diversification doesn’t mean trying to do everything—it means finding specific revenue channels that align with your strengths and complement your core business. You need to leverage the reputation and knowledge you currently have to start a business or invest in one that generates revenue without creating a ton of daily maintenance on your part.
Adding a new revenue stream can be daunting if you’re trying to do it alone. That’s where a coach comes in. A coach can help you assess which opportunities make the most sense for you personally and professionally, factoring in your market, resources, and long-term goals. They’ll help you avoid overextending yourself by focusing on a few key revenue streams for a powerfully diversified portfolio.
Revenue Stream Examples
Not every revenue stream works for every business operator, but some, like mortgage services, are an obvious choice. Here are a few examples:
- Traditional Ancillary Services: Mortgage, title, and other services related to your primary brokerage.
- Rental Income: Purchase investment properties and earn rental income for steady monthly cash flow.
- Commercial Real estate investments: Invest in larger-scale projects for potentially larger payouts.
- Consulting or coaching: With your experience, you can guide newer agents, adding a coaching income to your portfolio.
- Property management services: Managing properties for other investors can create steady, recurring income.
- Team Commission Splits: Bring on agents under your brand and earn a percentage of their sales.
- Referral Income: Build relationships with agents in other markets and earn referral fees for sending clients their way.
- Flipping or developing properties: Investing in property flips or small development projects can offer higher, one-time returns.
- OR ANY OTHER BUSINESS
Some of our coaching clients have invested in wineries, tech companies, and all other kinds of businesses.
Whatever you go for, it’s important to choose the ones that align with your strengths and goals. This is where you need to make sure you have a strong real estate business plan.
A Business Plan for Multiple Revenue Streams
Take your time when filling out our advanced business plan template which outlines each income source, strategies for client acquisition, financial projections, and the systems necessary to make everything run smoothly. This isn’t a “set it and forget it” approach—it requires careful planning and regular review to make sure each revenue stream is performing as expected.
You’ll need to work closely with your coach while business planning to ensure your new revenue stream can produce consistently without a ton of daily work on your part.
Level 7 is About Multiplying Everything
Reaching Level 7 is a huge achievement, but it’s also just the beginning of a new chapter.
You’ve already been wealthy, but now you’re learning to create wealth on a new level which will continue to flow after you’ve stepped away entirely. You can’t go at this alone. There’s only one last stage in the 8 Levels of Performance, and that’s creating your plans to exit the business and retire with generational wealth. You need to be prepared for that.
Having a coach is essential in helping you manage both the big picture and the minute details. At this stage, you’ll be working with a top-tier coach who has helped dozens of other high-end business leaders do the same.
Our coaching ecosystem is also where you’ll meet other top performers at your level. Tom always says that you are the sum of the five people you spend the most time with, so it’s important that you’re spending your time with people with the same (or greater) priorities and abilities.
If you’re serious about real generational wealth, schedule a business growth evaluation today.