How to make your business more diverse

Many great businesses have multiple sources of income, and the benefits of diversification were fully and firmly substantiated by the recent pandemic shutdowns. Now, as many business owners are beginning to emerge from the COVID-19 blockade, questions about futureproofing are raised. How do you make sure your business thriving again when borders are closed? Does your old offering still work in the ‘new normal? Perhaps, most importantly, how can you be ready should we be forced to go into lockdown again? The answer could lie in diversification for business.

Why should you diversify?

This is something experts have observed unfolding in the first quarter of this unusual year that has been 2020.

Diversification of business operations is a smart way to decrease your risk when operating within an unpredictable economy. It is a way to are prepared should something go wrong.

Diversification safeguards you not only from unanticipated shocks like COVID-19 however, it also protects you from more familiar problems like when competitors come along.

There are plenty of diversification options on the market, however there’s plenty to keep in mind before diving in fully.

We’re not going to suggest to go out and do something crazy – like invest massive amounts of money in something you are just not familiar with. But if you think about their current industry and experience, they will find that there’s always a plethora of peripherals that they’re not necessarily in which could offer enormous opportunities for them since it’s still within their comfort zone.

Getting started

Before you embark on your journey to diversify, it’s important to do your research.

Know where you’re heading and know who your competitors are especially if you’re entering into a new market.

As an example, if you’re producing equipment specifically for use in food processing, a good place to go to might be for consumables. In a strong economy, machinery is selling however, in a not too good one, like the present, people are still buying the consumables.

In the event that you do not have the knowledge of the market you’re trying to get into, it’s like driving on the highway with your 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 new market that’s beyond your capabilities or your knowledge in business, then you need to make sure you find someone with the knowledge. Everyone is good at certain things , but not so great at other things. Therefore, it is important to hire individuals with the knowledge and skills that you require. If you don’t have it you’re only increasing the risk.

There are risks to take into consideration

Diversifying your business also requires diversifying your focus.

Your goal is to please your customers and increase your base of clients. So, the issue when diversifying your business is that you’re putting in manpower on your new offering. If you’re not careful, you’ll are likely to use all your staff on the new opportunities and leave the existing ones in place.

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

Don’t bite off more than you are able to chew.

Be aware of taking the time to do this. I’ve seen countless businesses over the years that have gone broken because of doing things wrong… and that includes the largest, most sophisticated ones.

This is the problem of being a small-scale business owner, he adds. You face many of the same challenges as the big corporations however, you have less money to respond to and learn from your mistakes, which is why you need to be careful.

Any change in business or any investment in business comes with very risky. However, there are some good risks and make some extremely smart decisions, earning your money and succeed… If you’re smart about it.

Exploiting opportunities

Diversification was an essential requirement for certain businesses, such as one that makes gelato, which operates principally as a wholesaler to restaurants and gelato sellers. But by February of this year, they began to see problems on the horizon.

"I did not think that it would affect us in any way, based on the news from outside the United States"

However, one of their main customers, whose business relied heavily on foreign tourists had stopped taking orders.

At this point, they were one week into lockdown and realised they needed a diversification plan in order to make it through.

"I started looking around for other companies we could buy that might be in a similar way to what we are doing"

"I found another company that actually supplied supermarkets. I began looking into buying the majority of the business on lockdown and ended up buying 50% of the company."

This move didn’t just bring in a new client base. It also gave them to start a new business.

"Their manufacturing was performed by a third-party contractor. Therefore, by buying it, we’ve assumed the manufacturing contract"

"If we are forced to go through another lockdown or something happens it’s still the supermarket aspect of the business to continue to operate."

It was an excellent way for a business to take an opportunity to grow on an advantage the company already had.

It can feel like a do-or-die scenario. But rushing into things could hurt you in the end.

"Part of the issue is that when people find themselves into trouble they take the wrong decisions. Particularly now, with the effects of COVID-19" the expert declares. "So, my advice is to seek advice that isn’t emotional from someone who’s not directly connected to your business.

"If you’re experiencing emotional distress or financially and stress is piling up, it’s time to seek help. Get on the phone and talk to someone. There are lots of clever people out there who can aid, so don’t take on everything by yourself."