How to make your business more diverse

A lot of successful businesses have multiple income streams, and the advantages of diversification have been amply emphasized through the recent epidemic shutdowns. Now, as many entrepreneurs begin to emerge from the COVID-19 blockade, concerns regarding futureproofing are discussed. How can you ensure your business running again after the borders are shut? Do your current offerings be relevant in the current normal‘? And, maybe most importantly how can you be prepared should we have to go back into lockdown again? The answer could lie in diversification for business.

Why should you diversify?

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

Diversification of business operations is a way to lower your risk while working in an unstable economy. This means that you are prepared should something go wrong.

Diversification can protect you not only from unanticipated shocks , like COVID-19 However, it also shields you from more familiar problems like when competitors come along.

There are plenty of diversification possibilities out there but says there’s plenty to think about before you decide to dive the deep end.

We wouldn’t advise anyone that you embark on a journey to do anything crazy, like spending lots of money on something you’re just not comfortable with. But if you think about their current business space and know-how - there are always peripherals that they’re not obligated to be in which could offer enormous opportunities for them because they’re still their home.

Getting started

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

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

As an example, if you’re producing equipment to be used in the industry of food, the best place to go to might be consumables. In a good economic environment, the machinery will be selling, but in a not so good economy, like currently, consumers are still purchasing the consumables.

If you don’t have experience of the market you’re trying to get into, it’s just like driving down the highway while wearing a blindfold on.

It’s best to stay with what you’re familiar with particularly if this is your first time trying your toes in the pool of diversification.

If you’re looking to diversify into a market that isn’t within your business expertise or skills it’s best to make sure you find someone who does have that experience. We’re all adept at certain things , but not so great at others. Therefore, you should hire employees with the knowledge and skills that you require. If you’re not equipped with that you’re only increasing the risk.

Consider the risks

Diversifying your business involves diversifying your focus.

Your objective is to satisfy the customer and increase your client base. Therefore, the problem you face with diversifying your business is that you’re putting in people to create your new service. If you’re not careful, you are likely to use all your manpower on the new opportunities and leave those you’re currently working on.

It’s vital to make sure your customers are satisfied with the ones you already have while growing the number of customers you have.

Be careful not to chew more than you’re able to chew.

Make sure you take the time to accomplish this. I’ve witnessed a lot of companies throughout the years that go broke because they did the wrong thing… and that includes the largest, most sophisticated ones.

This is the problem of being a small business owner, he adds. There are similar problems like big companies, however, you have less money to respond to and repair your mistakes, therefore you have to be extra cautious.

Any change in business or investment in business is not without risk, but it is possible to take risk-free opportunities and make extremely smart decisions, earning yourself a lot of cash and make it successful… If you’re smart about it.

Finding opportunities

Diversification was a must for some business such as a gelato manufacturer who operates primarily as a wholesaler to restaurants and gelato sellers. However, by February of this year, had begun to see issues in the near future.

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

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

At this stage they were one week into lockdown and realised they needed a diversification plan for them to be able to get through.

"I started looking around for other businesses we could acquire that could be a good match to what we do"

"I found another company that was actually providing to supermarkets. I began working on buying part of that business over lockdown and ended up buying 50percent of the business."

This move did more than open up a new customer base. It also allowed them to enter into new business.

"Their manufacturing was done by an unrelated contractor. By buying it, we’ve bought the manufacturing contract"

"If we go into another lockdown, or something goes wrong, then we’ve still got the supermarket aspect of the business to carry on."

It was the perfect 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. But rushing into things could harm you over the long term.

"Part of the problem is that when people get into trouble they make the wrong decisions. Especially now with the impacts of COVID-19," He declares. "So my suggestion is to seek out non-emotional guidance from someone who isn’t associated with your business.

"If you’re struggling emotionally or financially, and your stress is building up, then go and seek help. Take the phone and talk to someone. There are lots of clever people around who could aid, so don’t take on the whole thing by yourself."