Finances

HMRC letter

In recent news, Etsy made a significant change by introducing a reserve system. This adjustment meant that some of their sellers found themselves with 75% of their earnings locked up for a lengthy 45-day period. When you consider that the remaining 25% went towards Etsy fees, it left these sellers with minimal income to sustain their businesses.

While I may not personally sell anything on Etsy, this development serves as a glaring warning for all businesses. It underscores the perils of relying solely on one income stream.

Let’s take a moment to reflect on this:

  1. Platform Dependency: Building your business entirely on a single platform, whether it’s LinkedIn, Facebook, or Instagram, can be a precarious endeavor. These platforms can close your account or change their policies overnight, leaving you in a vulnerable position.
  2. Lack of Ownership: If you put all your eggs in one basket and that basket isn’t yours to own, you’re exposing your business to substantial risks.

In the early stages, it’s natural to focus on one or two platforms to establish your presence. However, as your business grows, it’s essential to consider creating and safeguarding your intellectual property. Otherwise, you remain at the mercy of decisions made by others.

Consider these examples:

  • OnlyFans Controversy: Last year, OnlyFans announced plans to ban X-rated content, causing panic for those who depended solely on the platform for income.
  • YouTube Revenue Cuts: YouTube’s decision to reduce the percentage of ad revenue shared with content creators has left many questioning the sustainability of their income streams.

In both instances, individuals who relied exclusively on these platforms experienced the sudden threat of losing their primary source of income.

Mitigating Risk:

To protect your business, it’s imperative to diversify your income streams. Here are some proactive steps to consider:

  1. Build Email Lists: Cultivate a robust email subscriber base. It’s a direct and dependable channel for reaching your audience.
  2. Create Your Own Website: Establishing your website gives you control over your online presence and brand.
  3. Build Communities: Extend your reach by building communities on various platforms where you can engage with and market to your audience.
  4. Data Ownership: Ensure that you have control over your data and don’t entrust it entirely to third-party platforms.

By spreading your business across multiple platforms and safeguarding your intellectual property, you reduce the substantial risks associated with relying on a single income source.

Don’t put your business in jeopardy; instead, take proactive steps to secure its future.

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