New Revenue Streams Can Help Drilling Contractors Thrive
I think about my own bottom line all the time — and what my current bottom line means for future success. Ask any Gen X-er, and he’ll tell you that Social Security is as mythical as a unicorn. Given that, I work hard to protect my future and my family’s future. That means a couple IRAs, a 401(k), a small pension (remember those?), and a vigorous side hustle. Each of those represents a revenue stream, either today or sometime in the future. Each keeps the ball growing and rolling forward.
A business’ bottom line is no different, whether that business is drilling, importing, retail or whatever. Having multiple revenue streams makes a business healthy. Multiple revenue streams makes a business resilient. Multiple revenue streams combine to make a river of success, one that keeps flowing no matter what obstacles it crashes against.
I wrote about this recently on my blog (www.nationaldriller.com/blog). In response, Justin Domer of Domer’s in south central Florida wrote in.
“Our great-grandfather started the business on this same property in 1926 and later added well drilling as a way not only to diversify, but to meet the needs of our rural and heavily agricultural area,” he wrote. “Well drilling has been a staple in the business for many years, but we also provide: water treatment, irrigation repair, a machine shop, welding on all metals, metal sales, hydraulics, and we have a well stocked industrial hardware store.”
This comes from a fourth-generation family business. You think it’s a coincidence that Domer’s has lasted 90 years? Each of the items on that long list represents a revenue stream. Each of those streams makes Domer’s a little bit more likely to make it to a fifth generation.
Most of my readers work in drilling in one capacity or another. I know: big surprise for a magazine called National Driller. I want to keep them there, because it keeps us in business and makes our advertisers happy knowing they actually reach people who buy their products. But I hear from readers every time I’m at a trade show that geothermal is slow, or oil & gas is slow, or housing starts are in the toilet, or Obamacare is killing us, or whatever the latest industry lament is. I have a degree in journalism, so I feel your pain. I graduated into one of the worst markets newspapers had ever seen, with advertising in free fall. It only got worse.
But I like writing and editing, and eventually worked myself into a healthier subset of the media industry. Then I got to work diversifying my revenue — not necessarily to quit my day job (right, boss?), but to make it so I could keep writing and editing without worrying as much about a paycheck.
I urge you to do the same. As I wrote in that blog post, first ask yourself if you’re working that rig to its fullest potential. Streamline your processes — like setup and breakdown — to maximize the time the equipment spends actually making money. Then look around and see what skills you have in-house that can go to work on other streams of revenue. Maybe, like Domer’s, you have good metal working expertise already on the payroll. Maybe it’s something else. Get creative.
Uncertainty, these days, looks awfully certain. Markets go up and down. Demand for drilling services goes up and down.
We can’t control a lot of what happens. But we can acknowledge that uncertainty, make our peace with it and do something to shield ourselves from it. Diversifying your revenue today can help ensure that you’re drilling tomorrow.
What do you think? Do you have two, three, even four ways to bring money into your business? More? Tell me about it. Send an email to firstname.lastname@example.org.
Stay safe out there, drillers.