How to make your business more diverse

A lot of successful businesses have multiple sources of income. The benefits of diversification have well and truly reinforced by the recent pandemic shutdowns. Now when many business owners are beginning to emerge from the COVID-19 lockdown questions around futureproofing are being addressed. How do you make sure your business to be successful once boundaries are shut? Do your current offerings make sense in the ‘new normal‘? Perhaps most important, how can you be ready should we be forced to go into lockdown again? It could be in diversification for business.

Why diversify?

This is something experts have observed play out during the first half of the strange year known as 2020.

Diversification in your business is a way to lower your risk while working in an uncertain economy. This means that you have a back-up plan should an event occur.

Diversification protects you not just from shocks that aren’t anticipated, such as COVID-19 however, it also protects you from more familiar problems like when new competitors appear.

There are plenty of diversification options to choose from, but plenty to keep in mind before diving in headfirst.

We’re not going to suggest that you go out and do something outrageous, like investing massive amounts of money in something you are just not familiar with. But if people think about their current work environment and experience, they will find that there are always peripherals around that they’re not necessarily in that could be huge opportunities for them, since it’s still within their comfort zone.

Getting started

Before starting your diversification journey it’s essential to do your research.

Be aware of where you’re headed and know who your competitors are especially if you’re going into a new market.

If, for instance, you’re producing equipment specifically for use in food processing, a safe place to go to might be for consumables. In a prosperous economic environment, the machinery will be selling and is in high demand, however in a less that good economy, as today, people still buy the consumables.

In the event that you do not have the understanding of the market you’re trying enter, it’s like driving down the highway with a blindfold on.

It is recommended to stick with what you know particularly if it’s your first time trying your toes into the pool of diversification.

If you’re planning to diversify into a market that’s outside your business expertise or skills, then you need to take the time to find someone who does have that know-how. There are many things and not so good in other areas. So, make sure you hire employees who have the expertise and experience you require. If you don’t have that you’re only increasing the risk.

There are risks to take into consideration

Diversifying your business means diversifying your attention.

The goal is to please your customer and grow your customer base. Therefore, the problem you face when you expand your business is that you’re putting in the resources of your current offering. If you’re not carefulyou’ll are likely to use all your manpower on the new possibilities and leaving those you’re currently working on.

It’s essential to ensure you’re satisfying the customers you already have and growing the number of customers you have.

Be careful not to chew more than you are able to chew.

Be aware of taking the time to do this. I’ve witnessed a lot of companies throughout the years that go broke by doing the wrong thing… even the biggest, most intelligent ones.

That’s the challenge of being a small-scale business owner, says the owner. There are many of the same issues like big companies, however, you have less money to respond to and repair your mistakes. Therefore, you need to be careful.

Any business change or any decision to invest in business is very risky. However, you can get some really good risks and make some very smart decisions, earn your own money and succeed… provided you’re prepared.

Seizing opportunities

Diversification became an imperative for certain businesses, such as a gelato producer that operates primarily as a wholesaler to eateries and vendors of gelato. But by February of this year, it was beginning to notice problems appearing on the horizon.

"I didn’t really think it would impact us in any way, based on the news from abroad"

But then one of their main clients, whose business depended heavily on tourists from overseas and tourists, stopped accepting orders.

At this point, they were one week into lockdown when they realized that they required a diversification strategy for them to make it through.

"I began looking to see if there were any other businesses we could invest in that might be complementary to what we are doing"

"I discovered a different business that was actually providing to supermarkets. I began looking into buying part of that business over lockdown. I ended up purchasing 50% of the business."

The move didn’t only bring in a new client base; it also allowed them to start a new business.

"Their manufacturing was carried out by an outside contractor. Thus, by purchasing it, we’ve assumed their manufacturing contract"

"If we get into another lockdown or something else happens, then we’ve still got the grocery side of the business which will continue to operate."

It was an excellent way for a business to take an opportunity to capitalize on an advantage it already had.

It can feel like a do-or-die scenario. However, jumping into the wrong things could harm you over the long term.

"Part of the issue is that, when people get caught in trouble, they take mistakes. Particularly, now with the impact of COVID-19" he states. "So, my advice is to seek non-emotional advice from someone who’s not directly connected to your business.

"If you’re struggling emotionally or financially, and stress is piling up, it’s time to get some help. Call the number and speak to someone. There are lots of clever people around who could aid, so don’t take on it all yourself."