Finding New Ways to Generate Revenue Get creative when it comes to bringing in the dollars, and you'll find your bottom line's happier for it.
Have you ever heard the term "nontraditional revenue"? If you're not immersed in radio and TV ad sales, you're most likely not familiar with that industry buzz phrase, more commonly referred to as NTR. But the concept, when applied to your business, can add bottom-line income to your existing revenue streams.
A little history first: A number of years ago, when radio stations were being snapped up and co-joined into large, publicly traded radio groups, there was an urgency on the part of the parent companies to justify the high acquisition costs and demonstrate profitability to their shareholders. But traditional revenue for radio stations (ad sales) was limited for two good reasons. First, the price stations could charge for commercials was determined by ratings and day-parts in each particular market. Second, there was a finite inventory available on any given day, which also limited the amount of income stations could generate.
So they decided to get creative. Part of a radio station's promotional activities included sponsoring events staged by promoters. When an ad package was purchased by those promoters, the radio stations had to provide additional free commercials, live mentions, on-site talent appearances, and any number of other giveaways. In return, the stations were given signage placement, a space at the event and an on-stage opportunity--but very little else.
It didn't take long for station marketing directors to notice the promoter's revenue streams, which included parking fees, gate admissions, booth sales, beverage sales, print co-ops, sponsorships and the like. The marketing directors felt that since the radio stations provided the event visibility and were generally perceived as "owning" the event, they should grow, own and promote virtually identical events. So they did, creating entire NTR departments within their radio groups-and they've prospered ever since.
If growth is one of your goals for your business, finding new ways to generate revenue is a good first step. Here are a few example of how to apply the concept of nontraditional revenue to your own company to bring in more dollars:
1. Produce a trade show. If your business is one that serves the consumer service industry, you could create a themed trade show at a local hotel for you and other noncompeting service providers. For instance, if you own a bridal gown store, a catering service or a flower shop, you could create a bridal show for you and other bridal service providers, such as DJs, tux companies, photographers and printers. You'll generate admissions and booth revenue, plus you can use aggregate exhibitor money to buy advertising you wouldn't normally be able to afford.
2. Put on a traveling workshop. Does your business use a lot of vendors? Do you have branch offices? A software developer I know created a traveling workshop so customers and their employees could benefit from one-day seminars and demonstrations from industry-specific experts. You could do the same. You make money by charging the experts to purchase time in your seminar, and create sponsorship opportunities from second-tier vendors. For instance, if you own a gym, you could sell sponsorships to exercise equipment manufacturers or makers of health food products. A mini traveling trade show that doesn't cost your customers tons of money for employee travel and lodging is a real bargain for them and an income-generating opportunity for you.
3. Sublease space in your building for other supportive businesses. For instance, if you own a hair salon, you could rent space to other spa service vendors, such as manicurists or estheticians. Or if you own an auto repair shop, you could lease space to a coffee vendor or sandwich shop, offering your customers some enjoyable amenities while they wait for their car to be repaired.
4. Consider renting out your facility for events. This works especially well if you have a unique office, warehouse or business space. Restaurants, manufacturers and even warehouses are prime party venues for people throwing business events.
These are just a few examples to get you started. Now use your imagination to mine some untapped income.
Mark Cheplowitz is the president of Wizard of Ah's, a New York City-based international event planning and producing firm specializing in corporate branding and product launches through the creation of live spectacle presentations.
