Monday, June 13, 2011

Seven Earned Revenue Tips

We help nonprofits and groups that serve nonprofits with sustainable income and winning innovation. I just finished designing a project that generates income and mission (my 14th such project). By July 2012, the project will generate $44,000 in yearly income and serve 200 new customers. Here are seven tips gleaned from the project to help you create sustainable income:

1. The new service involves flipping an existing one. While the project will serve traditional customers, the innovation repositioned a side event to a main one. How might you create something new and profitable with existing components?

2. Remember the goal: the project will be self-sustaining. You will be delighted with the projected mission results. Do not forget the goal.

3. Run the numbers. Estimate income and expenses early. Run them at your planning mid-point and at the end. Adjusting paper models is easy.

4. Pricing always involves trade-offs. You can serve more by charging less, but if you charge too little the program won’t survive. Remember #2.

5. Start small. To test the idea, my client piloted it in January with 18 people.

6. Control growth. Resist the temptation to ramp up a new effort too rapidly. In this plan, the first year takes the project to a sustainable scale, and leaves room for future growth. The organization has the capacity to earn an additional $20,000 and serve 100 more customers, but ramping up this much would cause unnecessary stress and risk service quality.

7. Tap many sources. In addition to earned revenue, the project income includes four of the other seven sources. Income diversity enhances stability. Successful cocktails take mixing.

For more help improving your income flow, see recent issues of Added Value.


  1. I really like #1 about repositioning something that already exists. Looking under the "big rocks" of our offerings (in businesses too) can reveal a hidden gem full of earning power. Thanks for the tip!

  2. Thanks Jen,
    What also often works is dividing up a whole into parts. That is, you might offer a before, during or after enhancement for extra $--even if you offered all for one price in the past. Theaters that offer a conversation with the actors or directors are one example.