10 ways to diversify revenue as a startup

Money is always tight for startups, unless they’re lucky enough to have the backing of seed funding or other investment. Even then, it’s crucial to build a steady stream of revenue and keep overheads as low as possible.

Cash flow problems are a leading cause of startup failure, and a huge 60% of UK startups fail within the first three years.¹

To avoid this and ensure your venture is a success, you need to be looking at diversifying your revenue streams as early as possible. We’ll look at 10 ways to do this here, including creating new products, upselling, monetising your expertise and launching a subscription model.

But first, let’s take a look at why diversification is so crucial for brand new companies.

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Why is revenue diversification important for startups?

One of the main reasons that revenue diversification is so crucial is risk mitigation. By bringing in revenue from multiple streams, the business is not solely dependent on just one source of income.

By putting all your eggs in one basket, you could be putting your company at risk. This could potentially be catastrophic if something major changes in the market which impacts your main product or service, such as an economic downturn, political upheaval or supply chain disruption.

Diversification essentially gives you a safety net (or rather, a number of safety nets) - ensuring the business can survive even if the worst should happen.

There are other benefits of revenue diversification too, including:

• Capitalising on the success of existing products or services - this involves expanding on what you already do well to launch a new, potentially more profitable offer.
• Improving customer lifetime value (LTV) - if your customers already like what you do, there’s a good chance that they’ll also be interested in complementary products or services you create. You can also leverage the data you hold on existing customers to develop ways to cross-sell and upsell to them.
• Create new growth opportunities - you may soon reach a ceiling on how much of a particular product you can sell in a particular market. Diversification gives you the opportunity to expand to new markets, grow your business and increase both your revenue and market share.
• Building resilience - if the global COVID-19 pandemic taught businesses anything, it was the importance of versatility. In the face of unprecedented circumstances, some companies were able to pivot to new business models, product offers and even whole new ways of working - and it’s this adaptable approach that helps a company remain resilient and successful even in extremely challenging times.

Some of the world’s most successful companies built their success on this kind of strategy, recognising early on that they needed to diversify.

A prime example is Amazon, which moved beyond selling books after just three years in business - and went on to sell almost everything under the sun. There’s also Apple, which was saved from decline in the early 2000s by branching out from computers into music technology with the launch of the iPod and iTunes software - and later struck gold with the iPhone in 2007.

10 ways to diversify revenue as a startup

Now, let’s look at some of the potential options for diversifying your startup’s revenue stream.

1: Create new products or services

The most obvious way to diversify revenue is to create new products or services. There are lots of ways to do this, whether it’s launching a whole new product range or starting to offer complementary services. You can even reinvent existing products, giving them a digital or sustainable makeover.

For example, if you’re a service company which offers in-person consulting services, you may want to branch out into online training. If you’re a retail business focusing on clothing, you can launch a new range using sustainably sourced fabrics - or perhaps expand your range to include homewares.

2: Target new markets

Expanding to new markets can also help you to identify and capture new sources of revenue. You may want to expand into new domestic markets or target different demographics, or consider international expansion.

3: Upsell and cross-sell to existing customers

Your existing customers are a potentially lucrative source of new revenue streams, but only if you employ the right strategies. You can use the valuable insights you already have on their needs, pain points and buying behaviours to develop new products, services and packages which may appeal to them. Aim to complement your existing offer, looking for ways to add value across the customer journey.

4: Sell on online marketplaces

Finding new ways to reach customers is a great way to diversify revenue, even if you’re selling the same products and services. Selling on online marketplaces or through partners can help to broaden your customer base, helping you tap into new markets and expand your reach.

5: Launch subscriptions

Subscription models are a popular option for both startups and more established companies looking to diversify revenue.

It may not be a feasible option for your particular offer, but it’s definitely worth exploring whether it's possible. The major benefit of subscriptions is recurring revenue, which can do wonders for cashflow as well as customer loyalty and retention.

6: Create bundled packages

Rebranding or remarketing your existing products as a bundled package or plan can be an effective strategy for diversifying revenue. You’ll not only be creating added value for the consumer, but you’ll also be encouraging larger value purchases. It’s also great for boosting customer loyalty.

7: Monetise your expertise

Your current business may be new, but you yourself may have extensive experience in your chosen field. If so, it may be possible to turn this valuable expertise into a revenue stream to support the business.

For example, you could take on consulting work, create premium content, market yourself as a keynote speaker for industry events, deliver training or produce whitepapers or other content which can be included as part of premium subscriptions or plans.

8: Consider white-labelling or licensing

Another way to generate extra revenue from your products, services or technology - or even another form of intellectual property like a brand or a patent - is to licence them to other businesses.

For more control over product development, you can also look into white labelling - where you’ll allow another company to sell your product or service under their own brand name.

For example, video game companies can licence their product to a platform which sells it to end-users, or a beauty retailer white labelling a shampoo product so that it can be sold by another company under their own brand.

9: Partner with other companies

Partnerships can be a great way to diversify, particularly because they allow you to tap into new markets and customer bases.

You can collaborate through joint ventures, choosing brands which complement yours. Another option is affiliate marketing, where you’ll work with companies which have a strong presence in your target market.

10: Run events and/or classes

If you have expertise, share it - and bring in new revenue streams at the same time.

Live events, networking meetups, conferences, workshops, webinars and online classes are all opportunities to provide more value to your existing customer base, and to attract new customers. You can bolster loyalty, show off your credentials, establish yourself as an authority in your field and of course, charge fees for attendance. You may also want to look into sponsorship or partnership opportunities.

Grow your company and go global with Wise Business

While you’re focusing on diversifying and hopefully increasing revenue for your startup, it’s also worth making sure you’re set up with the right business account.

Open a Wise Business account and you can hold and exchange at once.

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After reading this, you should have a few ideas for starting to diversify your new company’s revenue streams. Not every option will be suitable for every business type, so you may need to put in the time to develop a strategy that works for your startup.

Sources used:

Sources last checked 07-Oct-2025
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