How to diversify your business

Many great businesses have multiple income streams, and the benefits of diversification were fully and firmly substantiated due to the recent pandemic shutdowns. Now as a lot of business owners are beginning to emerge from the COVID-19 lockdown, concerns regarding futureproofing are discussed. How can you get your business back on track when the borders are closed? Does your previous offering be relevant in the current normal? Perhaps most important what can you do to be prepared should we have to go back into lockdown once more? It could be in diversification of business.

Why diversify?

Experts have observed play out over the first half of the year that has been 2020.

Diversification of business operations is a smart way to reduce your risk when operating in an unpredictable economic environment. It’s a sign that you have a backup plan in case an event occur.

Diversification safeguards you not only from unexpected shocks such as COVID-19 as well as from common issues like the emergence of new competitors.

There are plenty of diversification possibilities on the market, however there’s plenty to think about before deciding to dive in headfirst.

We wouldn’t advise anyone to take a risk and do something crazy – like invest massive amounts of money in something that you’re not familiar with. If people consider their current work environment and their expertise, there are always peripherals around which they’re not necessarily and that offer huge potential for them, since it’s still their home.

Getting started

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

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

If, for instance, you’re producing equipment specifically for use in food processing, the best place to go to might be for consumables. In a good economic environment, the machinery will be selling and is in high demand, however in a less very good economic situation, such as today, people are still buying the consumables.

If you don’t have knowledge of the market you’re trying to enter then you’re 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 to dip your toes into the diversification pool.

If you’re considering diversifying into a new market that’s beyond your business expertise or skills and you’re looking for someone who can help, consider hiring someone with that know-how. We’re all good at some things , but not so great in other areas. Therefore, it is important to hire individuals with the expertise and experience you require. If you don’t have it, you’re just adding to the risk.

The risks to be considered

Diversifying your business also requires diversifying your focus.

The goal is to please your customers and increase your base of clients. So, the issue with diversifying your company is that you’re spending staff to develop your new product. If you’re not carefulyou’ll end up using all your staff on the new opportunities , leaving those you’re currently working on.

It’s vital to ensure your business is satisfying the customers that you already have, and also expanding that customer list.

Make sure you don’t chew more than you’re able to chew.

Make sure you take the time to complete this. I’ve witnessed a lot of companies throughout the years that go broke by doing the wrong thing… and that includes the biggest, most intelligent ones.

That’s one of the challenges of being a small-scale business owner, he adds. You face many of the same issues as the big corporations however, you have less money to respond to and learn from your mistakes, so you need to be careful.

Any change in business or any business venture is an investment that is risky, however it is possible to take good risks and make some very smart decisions, earn you a significant amount of cash and make it successful… if you’re smart about it.

Finding opportunities

Diversification became an imperative for certain businesses, such as the gelato maker who works principally as a wholesaler to Gelato vendors and restaurants. But by February of this year, had begun to notice problems appearing ahead.

"I did not think it would impact us much, but I did see the news from overseas"

Then one of their largest clients, whose business relied heavily on foreign tourists had stopped taking orders.

At this stage, they were one week into lockdown when they realized they required a plan for diversification in order to be able to get through.

"I began looking for any other businesses that we could purchase that would complement our current business"

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

The move didn’t only bring in a new client base. It also allowed them to enter into new business.

"Their manufacturing was carried out by a third-party contractor. By buying it, we’ve actually taken over the manufacturing contract"

"If we go into another lockdown, or something goes wrong and something happens, we’ll have the retail side of the business which will continue to operate."

It was an excellent illustration of a company taking a chance to build on its strengths that its already has.

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

"Part of the issue is that when people are into trouble they make the wrong decisions. Particularly with the current effects of COVID-19," the doctor declares. "So I would suggest 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, you should find some assistance. Get on the phone and talk to someone. There are plenty of intelligent individuals who can help, so don’t do it all by yourself."