Multiple streams of income sounds appealing, doesn’t it? If one source of income is lagging, it’s nice to know you have others. If one source takes off, you might be able to reduce or eliminate sources that require too much time or overhead.
But it’s difficult enough to build one business (practice), let alone simultaneously build two. We only have so many hours in a day, so much energy and enthusiasm, and so much capital. That’s why Mark Twain said, “Put all of your eggs in one basket and watch that basket”.
Another consideration is that if you start another business, you might frighten or confuse your clients. They may think you are struggling in your practice and wonder why. They may question your ability to continue serving them.
Nevertheless, at some point in our careers, we are all tempted by the notion of creating multiple streams of income. Before yielding to that temptation, here are some things to consider:
- Unless you’re looking for an exit strategy, don’t even think of starting another business until you are secure in your main business. Make sure your practice is well established and successful and you have experienced staff in place to take care of most of the work while you explore your new venture.
- Before looking outside your practice, look for ways to generate new sources of income inside of your practice. You might start new practice areas (by hiring new attorneys or outsourcing), offer the services of other professionals or businesses via joint ventures or as an affiliate, or produce books and courses or consult with other lawyers who want to learn your systems and methods.
- Opening a second office for your practice will be easier to set up and run than any other new business. There’s also much less risk because you are duplicating what you know works.
- Since most traditional businesses require a lot of time and/or capital, consider buying a franchise or starting a network marketing business. By leveraging the company’s existing systems, infrastructure, and tools, you won’t have to create them from scratch. You can also run your new business part time.
- Consider buying a business instead of starting one. An existing business with a proven track record and an established management team and customer base will (theoretically) allow you to turn a profit sooner and with less risk.
- If you have capital but not a lot of time, consider investing in an established business that is run by others, or in rental property.
- If you want to start a business from scratch, you’ll be better off doing something law-related where you can use your knowledge, reputation, and contacts to get your business up and running more quickly.
- Favor passive income businesses or investments. Get a business up and running and producing passive income, so you can then (a) start another business, (b), spend more time in your practice, or (c) retire.
It is definitely possible to create multiple streams of income. I’ve done it and so have many others. My advice? Be careful, be patient, and be open to learning and doing things you have never done before.
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