How to make your business more diverse

Many successful companies have numerous sources of income, and the advantages of diversification have been amply emphasized due to the recent pandemic shutdowns. Now when many business owners start to reappearing from the COVID-19 lockdown, questions about futureproofing are raised. How can you get your business back on track when the borders are shut? Does your old offering still fit into the new normal‘? Most importantly what can you do to be prepared in the event that we are forced to enter lockdown again? It could be in diversification of your business.

Why should you diversify?

Experts have observed play out in the first quarter of the unusual year that has been 2020.

Diversification of your business is a smart way to minimize your risk when working in an unstable economy. It is a way to have a backup plan in case an event occur.

Diversification safeguards you not only from unanticipated shocks , like COVID-19, but also from common issues like when new competitors crop up.

There are plenty of diversification possibilities out there but says there’s plenty to keep in mind before deciding to dive in with both feet.

We wouldn’t advise anyone that you go out and do something outrageous, like investing massive amounts of money in something that you’re not comfortable with. If people consider their current industry and experience, they will find that there’s always a plethora of peripherals that they’re probably not in which could offer enormous opportunities for them since it’s not yet their normal space.

Getting started

Before beginning your journey into diversification, it’s important to do the research.

Be aware of where you’re headed and who your competitors are especially if you’re going into a new market.

As an example, if you’re producing equipment to be used in the industry of food, a safe option could be for consumables. In a prosperous economy, the equipment is selling and is in high demand, however in a less very good economic situation, such as the present, people are still buying the consumables.

If you’re not equipped with understanding of the market you’re attempting to enter, it’s like driving on the highway with your blindfold on.

It’s recommended that you stay with what you’re familiar with particularly if this is the first time you’ve dipped your toe into the pool of diversification.

If you’re seeking to diversify into a market that isn’t within your capabilities or your knowledge in business is a must, so you should take the time to find someone who does have that know-how. We’re all adept at certain things and not so good at other things. Therefore, you should hire employees with the expertise and experience you require. If you don’t have it then you’re adding to the risk.

Risks to consider

Diversifying your business also involves diversifying your focus.

Your goal is to please your customer and grow your base of clients. This means that the issue you face when you expand your company is that you’re spending manpower on your new offering. If you’re not cautious, you’ll could end up spending all of your manpower on the new opportunities , and leaving those you’re currently working on.

It’s vital to make sure you’re satisfying the customers you already have, and also expanding your customer base.

Don’t bite off more than you can chew.

Make sure you take the time to do this. I’ve observed a multitude of businesses throughout the years that go broke because they did things wrong… all the way to the biggest, most intelligent ones.

That’s one of the challenges of being a small-scale business owner, says the owner. You’re faced with many of the same challenges that big companies face, but with less resources to react to and recover from your mistakes, which is why it’s important to be aware.

Changes in the business or business venture is very risky. However, there are some good risks and make some really smart moves, make your own money and be successful… if you’re prepared.

Finding opportunities

Diversification was an essential requirement for certain businesses, such as a gelato manufacturer who operates predominantly as a wholesaler of restaurants and gelato sellers. But by February of this year, it was beginning to notice issues appearing in the near future.

"I did not really believe it was going to affect us in any way, based on the news coming from overseas"

But then one of their major customers, whose company relied heavily on tourists from abroad was unable to fulfill orders.

At this stage they were a week into lockdown when they realized that they required a diversification strategy for them to survive.

"I began looking for other companies we could purchase that would be complementary to what we are doing"

"I found another business which was actually supplying supermarkets. I started working on buying part of the company during lockdown. I ended up purchasing 50% of the business."

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

"Their manufacturing was carried out by an unrelated contractor. So, by us buying it, we’ve actually taken over the manufacturing contract"

"If we get into another lockdown, or something goes wrong it’s still the retail side of the business that will continue to operate."

It was an excellent example of a business taking an opportunity to grow on its strengths that they already have.

It can feel like a do-or-die scenario. However, over-reacting to situations could hurt you over the long term.

"Part of the issue is that when people are caught in trouble, they make poor decisions. Especially now with the impacts of COVID-19" He declares. "So, my advice is to get some non-emotional advice from someone who’s not connected to your company.

"If you’re struggling emotionally or financially, and you’re feeling stressed and piled up, you should get help. Take the phone and speak to someone. There are lots of clever people around who could aid, so don’t take on everything by yourself."