Diversification in business is something that a lot of small business owners do not speak often about. However, the very successful ones will tell you that they have found that diversifying their portfolio of services or products has been essential to their success in business. So, what is diversification anyways? By its definition diversification means that you are reducing the risk associated with your business by adding services and products that will help your company’s bottom line.
You can focus these by location, markets, and even customer base. Here, we will outline for you three ways to diversify your business opportunities in order to improve your bottom line and the growth of your business. Before we begin, however, we’d like to cover the main reason why you need to diversify your services or products lineup and how not doing so can ultimately put your business at risk and at jeopardy.
Why You Should Diversify Your Business Opportunities
Have you ever heard of the term: One Trick Pony? It’s a term that is often used to refer to one person who only one special feature, talent, or area of expertise. The same can often be said for small business who only serve one audience, offer a very limited amount of products or services and tend to think very singular in regards to their objectives for growing their business. The issues are clear that in limiting their opportunities for growth and expansion, they end up staying stagnated in their process. Therefore, the need for diversification goes along with the need for innovation in business, they go hand in hand.
When you are innovative in your business, you are repeatedly bringing a fresh perspective to your menu of services and products offerings. This is the exact same concept as diversification, however, when you are looking at from an opportunities standout, it’s going to look a little different than if you were just adding a bunch of services and products at random. Typically, this would be the first step that many business owners take in order to create diversified business opportunities. So, let’s dive in!When you are innovative in your business, you are repeatedly bringing a fresh perspective to your menu of services and products offerings. Click To Tweet
Diversifying Through Expansion
Investing back into your business in order to expand your services or products listings is one of the fastest ways to create diversification for your brand. Using expansion as a diversification strategy will not only help your business move along more quickly, but it will help you to determine how committed your audience is to some of your other services or products. This an important concept to consider because as your business ages, so does your customer base.
In order to remain relevant with your audience, you’ll want to do your part in making sure that no one is left behind. By offering a more diverse and well-rounded lineup of products and services you will take your customers and clients along a journey that ensures they remain a part of your loyal following for years to come. One key takeaway here is to spend some time researching the products and services you are planning on adding to your lineup. This is where many small business owners get it wrong and you should avoid a decision that is not based on facts or data, but rather expand based on what is needed in the market and move accordingly.
Diversifying Through Cultural Revamp
Some may call this a rebrand or a brand refresh, and in many ways it is. There are times when you can almost sense when a branding shift is happening for a company and this is a wonderful time to consider the benefits this will bring to your diversification strategy. From a business consulting standpoint, we do not often suggest that companies rebrand, because often times the loss in doing this is greater than making some minor adjustments to other necessary areas.
However, the fact of the matter is that many companies do not embrace this opportunity as a means to gain more notoriety; which will then lead to more an increase in sales for their business. This type of diversification goes deep into your companies core values, which we know can and will change often during the lifestyle of any organization. If you, as the CEO of your brand, find that there is a social cause or opportunity to get more involved in making a cultural impact on behalf of your first fans, your team members.
Diversifying Through Networking
The last and one of the best forms of diversifying your business will come through the relationships within your business network. This is one of the most undervalued forms of diversification because we often see competitors as just that “the competition”, instead of collaborators. Instead of seeing your community of like-minded individuals and colleagues, you have to start seeing it as a lucrative opportunity that must be explored. There are several reasons why you should be integrated into your community – which will often include collaborations with your industry.
By embracing your network and community, you are opening your business for many opportunities that will often lead to sales, leads, and collaborations. These types of collaborations are seen by clients and customers are healthy. When you collaborate with other businesses, the client or customer is the one that stands to win. Why? Well, they are getting more bang for their buck! These collaborations often lead to innovations in technology, product and services lineup. The more you collaborate the more we will be expand the reach of your business.
Finding Balance in Diversification
We’d like to state the diversifying as a fine line, and while you want to certainly consider the three different ways for diversifying your business opportunities, stated above, you want to do these gradually. Your business, is its own entity and you should treat it like such. Therefore, give each of these a try and test to see if they are worth your time in return. We guarantee you that all three will work, however, not at once. Give them each it’s time and place within your strategic business plan and embrace the changes that will come, as well as the income potential.