How to make your business more diverse

Many successful companies have numerous sources of income, and the advantages of diversification have been amply emphasized through the recent epidemic shutdowns. Now, as many business owners begin to re-emerge from the COVID-19 lockdown concerns about futureproofing are being raised. How do you make sure your business to be successful once the borders are closed? Do your current offerings fit into the new normal‘? Most importantly is how do you get ready should we be forced to go into lockdown again? It could be in business diversification.

Why should you diversify?

Experts have seen play out throughout the first two months of the strange year of 2020.

Diversification of business operations is a smart way to lower your risk while operating in an unpredictable economic environment. It means you have a backup plan should an event occur.

Diversification protects you not just from unexpected shocks such as COVID-19, but also from the more common problems that arise when new competitors appear.

There are plenty of diversification options out there but says there’s plenty to keep in mind before you decide to dive headfirst.

We’re not suggesting to anyone to take a risk and do anything crazy, like spending massive amounts of money in something you’re just not comfortable with. However, if they think about their current work environment and experience, they will find that there are always peripherals around that they’re probably not in, which are huge opportunities for them since it’s still their home.

Getting started

Before starting your diversification journey it is essential to complete your research.

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

If, for instance, you’re producing machinery specifically for use in food processing, a secure location to look for could be for consumables. In a good economic environment, the machinery will be selling however in a not that good economy, as right now, people still buy the consumables.

If you’re not equipped with the expertise of the market that you’re trying to get into, it’s like driving on the road with a blindfold on.

It’s best to stick with what you know particularly if it’s your first time to dip your toes in the pool of diversification.

If you’re seeking to diversify into a market that’s outside your expertise or knowledge of business is a must, so you should make sure you find someone with the experience. We’re all good at some things , but not so great in other areas. So, make sure you hire employees who have the knowledge and skills that you need. If you’re not equipped with that you’re only increasing the risk.

Risks to consider

Diversifying your business involves a broader focus.

Your objective is to satisfy your client and expand your customer base. This means that the issue you face with diversifying your company is that you’re spending manpower on your new offering. If you’re not careful, you’ll will end up spending all your resources on new opportunities , leaving the old ones behind.

It’s incredibly important to ensure that your business is satisfying the customers that you already have while growing your customer base.

Be careful not to chew more than you can chew.

Take your time to accomplish this. I’ve seen thousands of businesses over the years who go broke by doing the wrong thing… including the big, smart ones.

That’s the difficulty of being a small-scale business owner, he says. You’re faced with similar problems similar to big corporations, but with less resources to react to and correct your mistakes. Therefore, it’s important to be aware.

Any business change or investment in business is an investment that is risky, however there are some great risks and make very smart decisions, earn yourself a lot of money and succeed… when you’re smart about it.

Exploiting opportunities

Diversification became an imperative for some business such as the gelato maker who works predominantly as a wholesaler of eateries and vendors of gelato. However, by February this year, had begun to see problems that were looming.

"I did not think it would affect us in any way, based on the news from abroad"

Then one of their largest clients, whose business depended heavily on tourists from overseas, stopped making orders.

At this point the group was one week in lockdown and realized they needed a diversification plan if they were going to make it through.

"I started to look around to see if there were any other businesses we could buy that might be in a similar way to what we are doing"

"I found another company that was actually supplying to supermarkets. I started working on buying the majority of the business on lockdown and ended up buying half of the business."

The move didn’t only open up a new customer base, but also enabled them to take on new business.

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

"If we are forced to go through another lockdown or something else happens it’s still the grocery side of the business to carry on."

It was an excellent way for a business to take a chance to build on an advantage its already has.

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

"Part of the issue is that, when people get in trouble, they make the wrong choices. Particularly with the current effects of COVID-19," he states. "So I would suggest to get some non-emotional advice from someone who’s not associated with your business.

"If you’re experiencing emotional distress or financially and stress is piling up, then go and get 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."