How to make your business more diverse

Many successful companies have numerous income streams, and the advantages of diversification have been well and truly reinforced due to the recent pandemic shutdowns. Now when many business owners begin to re-emerge from the COVID-19 blockade, concerns about futureproofing are being discussed. How can you get your business to be successful once borders are closed? Does your old offering still fit into the new normal‘? Perhaps most important is how do you get prepared in the event that we are forced to enter lockdown once more? The answer may lie in diversification for business.

Why should you diversify?

This is something experts have observed play out throughout the first two months of the unusual year that has been 2020.

Diversification of business operations is a smart way to minimize your risk when working in an uncertain economy. It’s a sign that you have a backup plan should an event occur.

Diversification protects you not just 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 opportunities available, but there’s plenty to keep in mind before deciding to dive in headfirst.

We’re not going to suggest that you undertake something crazy – like invest huge sums of money into something you’re not comfortable with. However, if they think about their current industry and experience, they will find that there are always other areas that they’re not obligated to be in that could be huge opportunities for them, because it’s not yet their normal space.

Getting started

Before embarking on your diversification journey, it’s crucial to complete your research.

Know where you’re going and who your competitors are - especially if you’re going into a new area.

If, for instance, you’re producing equipment that is used for food production, the best place to go to might be consumables. In a good economy, the equipment is selling, but in a not so good economy, like currently, consumers still buy the consumables.

If you’re not equipped with the understanding of the market you’re trying to get into, it’s like driving down the highway with a blindfold on.

It’s suggested to stick with what you know particularly if it’s your first time dipping your toe in the diversification pool.

If you’re planning to diversify into a market that’s outside your skillset or business knowledge and you’re looking for someone who can help, make sure you find someone with the expertise. We’re all adept at certain aspects, but not great at other things. Therefore, you should hire employees with the knowledge and skills that you need. If you’re not able to do that then you’re just increasing the risk.

There are risks to take into consideration

Diversifying your business requires diversifying your focus.

Your aim is to satisfy your customer and grow your customer base. So, the issue when you diversify your business is that you’re using manpower on your new offering. If you’re not careful, you’ll are likely to use all your effort on the new opportunities , and leaving the current ones behind.

It’s incredibly important to make sure you’re satisfied with the customers you already have, and also expanding your customer base.

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

Be aware of taking the time in doing this. I’ve witnessed a lot of companies throughout the years that go bankrupt by doing the wrong thing… and that includes the largest, most sophisticated ones.

That’s the challenge of being a small-scale business owner, says the owner. You face many of the same issues that big companies face, however, you have less money to respond to and learn from your mistakes. Therefore, it’s important to be aware.

Any change in business or investment in business is a risk, but there are some risk-free opportunities and make really smart moves, make yourself a lot of cash and make it successful… when you’re prepared.

Scooping up opportunity

Diversification became a necessity for some business such as one that makes gelato, which operates primarily as a wholesaler to Gelato vendors and restaurants. But by February of this year, they began to see issues in the near future.

"I didn’t really think it would affect us too much, seeing the news coming from overseas"

Then one of their main customers, whose company relied heavily on overseas tourists was unable to fulfill orders.

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

"I started looking around for other businesses we could buy that might be a good match to what we are doing"

"I found another company that was actually supplying to supermarkets. I began to work on purchasing the majority of the business on lockdown. In the end, I bought 50% of the company."

The move didn’t only create a new customer base. It also allowed them to start a new business.

"Their manufacturing was done by a third-party contractor. By buying it, we’ve actually assumed their manufacturing contract"

"If we enter another lockdown, or something happens it’s still the grocery side of the business which will continue to operate."

It was an excellent instance of a business taking the chance to improve a strength it already had.

It can feel like a do-or-die scenario. However, jumping into the wrong things could cause harm in the end.

"Part of the problem is that when people find themselves into trouble they make the wrong choices. Particularly, now with the impact of COVID-19" the doctor declares. "So my advice is to get some non-emotional advice from someone who isn’t tied to your business.

"If you’re experiencing emotional distress or financially and you’re feeling stressed and piled up, then find some assistance. Call the number and speak to someone. There are plenty of intelligent people around who could aid, so don’t take on it all by yourself."