One of the key strategies talked about in the investment sector is diversification. An investor’s ability to spread risk and maximise returns are some of the many benefits of a varied income portfolio. However, the benefits of diversification are not limited to investments alone.
In this article, we discuss the benefits of having a diverse income and how The Cornerstone Network can help.
Why is diverse income important?
Mortgage brokers are committed to building relationships with their clients over many years, often serving decades of family generations. That said, while brokers work incredibly hard and provide a professional service, they don’t always safeguard themselves and their business longer term.
It’s important to acknowledge the risks of diversifying your income if it’s not adopted using a calculated strategy. By offering more services, mortgage brokers should be mindful not to spread themselves too thinly. Becoming a ‘Jack of all trades’ without the right resource can negatively affect client retention and reputation, increase complaints and harm a business.
Brokers must carefully plan all aspects of diversification and focus on doing their core job well before entering an environment where other revenue streams can be obtained with little or no disruption to their existing business.
What are the benefits?
- By having a variety of income streams, your business is not dependent on the success of one singular source, product or industry. During an industry change or an economic downturn, having a diverse income can better protect your business. Should one of your business streams become affected, having multiple revenues available can help mitigate significant financial loss.
- Exploring different avenues of revenue provides the opportunity to increase your portfolio of services. By offering more to your clients, your client base will likely grow, and your client satisfaction levels will rise. As a result, your business has the potential to reap the rewards of significant income growth, improved cash flow and strong levels of passive income.
- Growing your income portfolio can increase your business’ value. If you ever plan on exiting your business, diversification will appeal to a wider range of buyers and a much higher sale value of your business.
At The Cornerstone Network, we provide unrivalled cross-sale opportunities, enabling you to offer more for your clients and boost your earnings. To discuss how our network may be able to help you and your business, please give us a call on 02921 660 550 or get in touch.