Learn the benefits of digital revenue streams and how they can future proof your business.
No one can predict when the next hit to your business will come, but you can set yourself up to better withstand volatility by creating reliable digital revenue streams.
Implementing digital revenue streams not only helps future proof your business so you can become more resilient overall, but you can also enjoy the positive effects on your bottom line in a thriving economy.
What is digital revenue?
Digital revenue can take many forms. It can range from simply selling a service or product online to adding complementary digital services, such as allowing people to digitally “try on” glasses or lipstick by uploading photos, or even creating a new platform business by connecting buyers and sellers (like Uber or Airbnb).
Below are some of the benefits, adapted from Gartner (full content available to clients).
Why is digital revenue important for my small business?
In a recent Capterra survey, 73% of small business owners worry they’ll need to close within six months. This stat really highlights the need for business owners to adopt digital revenue streams sooner rather than later. Learn more about our methodology.
Digital revenue costs less to generate
Once you have a good digital infrastructure in place, it’s usually much easier to scale. For instance, if you’re a therapist and you begin practicing via telehealth, it doesn’t cost you anything extra to add another patient to your practice. You already have your telehealth provider set up, and the technology is already being used with several other patients.
Digital revenue requires less capital investment
With a digital model, you don’t need as much of a physical presence or physical storage space. For instance, if you want to set up an e-learning workshop, you don’t need to worry about paying for the space, refreshments, or supplies.
With a digital business, you also have the freedom to test out new products easily. If you have an idea for a new product or service, you can simply make a prototype and put it up for sale on the site. If you get a huge demand for the product, great—you can ramp up production. On the flip side, if you don’t get any bites, not a problem—you only made a single prototype so there wasn’t a lot of waste or loss involved.
Digital revenue streams allow for recurring flows through a subscription model
When you’re set up with a digital shopfront, you can easily set up recurring flows or subscription models.
For instance, if you’re a yoga studio, you can encourage unlimited monthly subscriptions which guarantee steady and predictable income for your studio. Or, if you’re a coffee roaster, you can encourage businesses or individuals to set up subscriptions via your eCommerce platform, which makes it easier for both you and your customer by automating part of the shopping experience.
Digital revenue makes it easier to earn across multiple geographies
Once you have a good digital system, you can see additional possibilities open up that don’t limit you to a physical location. The beauty of an online degree program is that students can access a renowned curriculum in their area of interest regardless of their physical location.
Alternatively, if you own a fitness studio, you’re no longer restricted to only those customers who are in close proximity. If you have a unique offering, clientele from all over the world may be interested in tuning in to your online classes for the exclusive benefits you offer.
A strong digital presence sets you up for success
It may take some extra effort up-front to optimize your business for digital revenue, but it’s worth it in the end. Adding digital revenue capabilities ensures your business is more adaptable for unknown future events, and sets a sturdy platform for you to be able to scale your business with new products, services, and clientele.
You can learn more about how COVID-19 affected small digital businesses. The full research report is available here.
Results based on Capterra’s survey of 503 small-business leaders, defined as presidents/vice presidents, C-suite, or owners/founders at U.S. companies with 2-250 employees in March 2020. 370 out of the 503 respondents lead small businesses that conduct most or all of their business virtually.
Looking for eCommerce software? Check out Capterra's list of the best eCommerce software solutions.