Spreading your energy and income out over multiple income streams is a very attractive idea. If one business fail then you still have the rest. You are hedged against bad luck.
In fact, if it was as simple as saying you could earn the same amount of money from one business, or spread out over five. You would obviously choose to spread out. But it’s not as simple as that. Starting businesses is hard, and it is often easier to double the size of an existing business than it is to start a whole new one.
And the reality is you are probably going to be choosing between one very good business, or multiple half-arsed ones. Do one thing really well, or lots badly.
If you think about it, it’s very similar to the age-old question: is it better to be a jack of all trades or master of one?
It Depends On Your Goals
Entrepreneurs often get described as great risk takers. People who put it all on the line to start a business. Throwing the dice on a high chance of failure for a small chance of riches and changing the world.
That is definitely true for some entrepreneurs, but it is very far from the truth for lifestyle entrepreneurs like me. I start businesses because I want to be my own boss, control my own time and work on stuff I enjoy. Getting into the Times Rich List is not and has never been my goal.
I try my very best to avoid any risks that would affect my quality of life. Including by having multiple income streams.
- Want to get stinking rich but at the risk of ending up with nothing? Focus on one business.
- Want to be as protected as possible and ensure that one or two disasters won’t bring it all falling down. Focus on multiple income streams.
It Depends On Your Personality
Unless you have incredibly self-disciplined it is almost impossible to force yourself to work productively and hard on something you’re not that interested in. And when you’re self-employed that is what you find yourself doing a lot.
I have spoken about it before, but I get bored quickly. I love a new project and am very curious. So I have found that I will do a lot more work if I can flick between projects. When I get bored of one or can’t summon up the motivation to work on it, I switch to another.
But I am quite unusual in just how lazy I can be. I have plenty of friends who really thrive in the one business environment. They love building and growing their company. And thrive off the potential.
- Do you need constant stimulation to keep you interested? Focus on multiple income streams.
- Are you self-disciplined or have intense focus? Focus on one business.
- Do you like to start new things? Focus on multiple income streams.
- Do you like to build and grow current projects? Focus on one business.
It Depends On Opportunities
Not all businesses are infinitely scalable and at some point the extra effort you put in starts yielding smaller and smaller results.
One example of this is my table tennis business. We quickly grew it to be the best-selling table tennis bats in the UK. Where do you go from there? We have grown outside the UK and taken on other countries, but pretty quickly got to the point where there wasn’t worth putting in much more work. It became a no-brainer that our time was better spent focusing on different businesses.
On the other end of the spectrum is my gin business, Pipehouse Gin. It is such a broad-reaching and popular product that there are almost infinite directions to go in and still has an enormous amount of potential growth. There are thousands of pubs and bars to contact. Many other countries to expand to. And a lot more popular gins to take on.
- Have you reached the limit on your current business? Focus on starting a new one.
- Is there still a lot you can do? Focus on one business.
Where do I Fall?
My first income stream was matched betting which I started doing with a group of friends. Of the three of us, two have focused on it ever since, while I went off and created multiple income streams (as you can see from my list of current businesses). In absolute terms, the two who stuck with it have made a lot more money than me.
But that doesn’t mean I made the wrong decision. I had different goals, a different personality and different opportunities. And while I do occasionally get jealous or doubt my choices, I definitely made the right decision for me.