How to make your business more diverse

Many great businesses have multiple sources of income. The benefits of diversification have amply emphasized due to the recent pandemic shutdowns. Now as many business owners start to reappearing from the COVID-19 lockdown concerns regarding futureproofing are discussed. How can you get your business back on track when the borders are shut? Do your current offerings work in the ‘new normal‘? Perhaps, most importantly, how can you be prepared in the event that we are forced to enter lockdown once more? The answer could lie in diversification of your business.

Why should you diversify?

Experts have seen play out over the first half of the unusual year known as 2020.

Diversification of your business is a strategic way to reduce your risk when working in an unstable economy. It is a way to are prepared should an event occur.

Diversification safeguards you not only from unanticipated shocks like COVID-19 However, it also shields you from problems you are familiar with, such as when competitors come along.

There are plenty of diversification possibilities out there but says there’s plenty to consider prior to diving with both feet.

We’re not going to suggest that you embark on a journey to do something outrageous, like investing lots of money on something you’re not comfortable with. If people consider their current business environment and know-how - there are always other areas that they’re not necessarily in that could be huge opportunities for them, since it’s still within their comfort zone.

Getting started

Before beginning your journey into diversification, it is essential to complete your homework.

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

As an example, if you’re producing equipment for the food industry, then a secure source could be for consumables. In a good economy, the machinery is selling and is in high demand, however in a less too good one, like today, people are still purchasing the consumables.

If you’re not equipped with the understanding of the market you’re trying enter, you’re like driving down the highway with your blindfold on.

It’s best to stick with what you know, especially if this is your first time to dip your toes in the pool of diversification.

If you’re looking to diversify into a new market that’s beyond your skillset or business knowledge and you’re looking for someone who can help, be smart about getting someone with the know-how. There are many things and not so good at others. So, make sure you hire employees who have the experience and expertise you need. If you’re not equipped with that, 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 customer and grow the number of customers you serve. Therefore, the problem you face when diversifying your business is that you’re putting in manpower on your new offering. If you’re not carefulyou’ll will end up spending all your manpower on the new possibilities and leaving the current ones behind.

It’s incredibly important to ensure that you’re satisfying the customers you already have while growing the number of customers you have.

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

Be smart about taking your time to do this. I’ve witnessed a lot of companies throughout the years that go broke because they did things wrong… and that includes the largest, most sophisticated ones.

That’s one of the challenges of being a small-scale business owner, he says. There are many of the same issues that big companies face, but you’re not able to have the resources to respond to and recover from your mistakes, so you need to be careful.

Any business change or any decision to invest in business is very risky. However, you can take some great risks and make truly smart choices, and earn your money and have a great time… If you’re prepared.

Scooping up opportunity

Diversification became a necessity for certain businesses, such as a gelato manufacturer who operates mostly as a wholesaler for Gelato vendors and restaurants. However, by February of this year, it was beginning to see issues on the horizon.

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

However, they noticed that one of their largest clients, whose business depended heavily on overseas tourists, stopped making orders.

At this point they were a week into lockdown , and they realized that they required a diversification strategy for them to survive.

"I started to look around for other companies we could buy that might be in a similar way to our current business"

"I found another business which was actually supplying supermarkets. I began looking into buying the business during lockdown. In the end, I bought 50% of the company."

This move did more than bring in a new client base, but also enabled the company to expand their business.

"Their manufacturing was performed by an outside contractor. Thus, by purchasing it, we’ve actually bought their manufacturing contract"

"If we enter another lockdown or something else happens, then we’ve still got the supermarket side of the business which will carry on."

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

It can feel like a do-or-die scenario. However, rushing into things can cause harm in the long run.

"Part of the issue is that when people find themselves in trouble, they take mistakes. Particularly now, with the effects of COVID-19," he declares. "So, my advice is to seek advice that isn’t emotional from someone who’s not directly connected to your business.

"If you’re experiencing emotional distress or financially and you’re feeling stressed and piled up, it’s time to get some help. Call the number and talk to someone. There are a lot of smart people out there who can help, so don’t do it all yourself."