How to make your business more diverse

Many successful companies have numerous income streams, and the benefits of diversification have well and truly reinforced by the recent pandemic shutdowns. Now as many business owners are beginning to emerge from the COVID-19 lockdown concerns regarding futureproofing are asked. How can you ensure your business to be successful once boundaries are shut? Does your old offering still be relevant in the current normal? Perhaps most important, how can you be ready should we be forced to go into lockdown once more? It could be in diversification for business.

Why diversify?

Experts have observed play out throughout the first two months of the year that was 2020.

Business diversification, is a way to decrease your risk when working in an uncertain economy. This means that you have a back-up plan should things go wrong.

Diversification can protect you not only from shocks that aren’t anticipated, such as COVID-19 as well as from more familiar problems like when new competitors crop up.

There are plenty of diversification opportunities on the market, however there’s plenty to think about before deciding to dive in the deep end.

We wouldn’t advise anyone to go out and do something crazy – like invest massive amounts of money in something that you’re not familiar with. But if you think about their current industry and know-how - there’s always a plethora of peripherals which they’re not necessarily which could offer enormous opportunities for them, since it’s still their home.

Getting started

Before embarking on your diversification journey, it’s essential to do your homework.

Know where you’re going and who your competition is - especially if you’re going into a market that isn’t yet established.

If, for instance, you’re producing equipment for the food industry, then a safe source could be for consumables. In a healthy economic environment, the machinery will be selling however in a not so good economy, like today, people still buy the consumables.

In the event that you do not have the knowledge of the market you’re attempting to enter, it’s like driving down the road with a blindfold on.

It’s recommended that you stick with what you know particularly if this is the first time you’ve dipped your toe in the pool of diversification.

If you’re seeking to diversify into a field that’s not within your expertise or knowledge of business and you’re looking for someone who can help, make sure you find someone with that knowledge. We’re all good at some things , but not so great at others. Therefore, it is important to hire individuals with the expertise and experience you require. If you don’t have that then you’re just increasing the risk.

The risks to be considered

Diversifying your business requires diversifying your focus.

The goal is to please your client and expand the number of customers you serve. So, the issue with diversifying your business is that you’re putting in manpower on your new offering. If you’re not careful, you will end up spending all your staff on the new opportunities , and leaving the existing ones in place.

It’s crucial to ensure that your customers are satisfied with the ones you already have, while also growing those who are your customers.

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

Take your time in doing this. I’ve seen thousands of businesses in the past who went broken because of doing an unwise thing… and that includes the big, smart ones.

This is the problem of being a small-scale business owner, he says. You face many of the same issues similar to big corporations, but with less resources to react to and learn from your mistakes, so you need to be careful.

Any business change or decision to invest in business is an investment that is risky, however there are some good risks and make some extremely smart decisions, earning your money and have a great time… if you’re smart about it.

Exploiting opportunities

Diversification became an imperative in some industries, like the gelato maker who works principally as a wholesaler to Gelato vendors and restaurants. However, in February of this year, had begun to see problems that were looming.

"I did not really believe that it would affect us in any way, based on the news coming from out of the country"

However, they noticed that one of their major clients, whose business relied heavily on tourists from abroad was unable to fulfill orders.

At this point they were a week in lockdown and realized they needed a diversification plan in order to survive.

"I started looking around for other businesses we could invest in that might be complementary to what we are doing"

"I discovered a different business that actually supplied supermarkets. I started working on buying part of the company during lockdown, and eventually bought 50percent of the business."

This move didn’t just provide a new customer base. It also gave them to enter into new business.

"Their manufacturing was done by an outside contractor. Thus, by purchasing it, we’ve actually purchased the manufacturing contract"

"If we get into another lockdown or something happens, then we’ve still got the retail side of the business that will carry on."

It was the perfect example of a business taking the chance to improve the strengths its already has.

It can feel like a do-or-die scenario. However, rushing into things can cause harm over the long term.

"Part of the issue is that when people are in trouble, they make mistakes. Especially now with the impacts of COVID-19," the doctor states. "So my suggestion is to seek non-emotional advice from someone who isn’t tied to your business.

"If you’re experiencing emotional distress or financially and stress is piling up, then go and find some assistance. Pick up the phone and speak to someone. There are a lot of smart individuals who can aid, so don’t take on it all by yourself."