Picture your local book shop. In the past, there were plenty around, they had huge premises packed to the brim with books, and they were busy. Nowadays, book shops are much harder to locate. The digital age moved their goalposts. Despite their affinity for books, die-hards who were too stubborn to acknowledge the tides of change simply ran out of customers. The book shops that have survived, though, have done so by diversifying:
- partnership coffee shops lure us in
- children’s games are positioned near their books
- quirky, intellectual gifts are available
- wrapping paper and greeting cards
- electronic offerings
Especially at a time when product life cycles and customer sensibilities change faster than a speeding ticket, it is vital for small businesses to be creative when it comes to broadening horizons. Here are some ways to avoid putting all your eggs in one basket:
If, like book stores, technological changes are eating into your business model, you need to be ahead of the curve. Dedicate time to keep your finger on the pulse so that you can sense where things are going, and start catering to “early adopters”.
Offer an all-inclusive package including extras such as training, cloud services, needs audits, servicing… the possibilities are endless.
Widen your customer net by adjusting your product or service so it appeals to a new group. So, if you are an exclusive brand, create a less-expensive range. Consider how to run parallel “expert” and “hobbyist” versions of the same line.
Switch it up: sell online if you don’t already. Consider a network of distributors to sell physically if you currently sell online.
Branch out – literally! Look at opening branches in other areas. If your eye is on over border markets, but you are worried about the risks, network to see if any related businesses are exploring overseas ventures. You might find a project where your company fits in.
A word of warning
Diversification definitely has a place in modern business. However, being aware of its necessity and opportunities doesn’t mean that you have to diversify.
1. Explore your options. Brainstorming possibilities isn't a problem; selecting the best one is. Consider how you can leverage what you're already doing by stepping up to the next level of product or service. What are you not offering – a related business in your industry, niche is connected to yours, a complementary product or service?
2. Know your limits. Look at what you have to invest, in terms of both finance and resources. What are the limits you're facing? What are the limits you need to self-impose?
3. Sustainable growth. Entrepreneurs are hard-wired for the thrill and excitement of all things new. That is an excellent for diversification, but don't lose sight of the maintaining your current business needs. Employ wisely to help manage both your new growth as well as your foundational work - you can oversee both. Don’t neglect the old for the sake of the new.
Growth is only good when it’s strong growth
Diversifying can propel your business to new levels, enlarge your customer pool, and increase your profits – but only if you do it right. Don't rush into anything until you've done your due diligence and know that the new endeavour is indeed the best one for you and your business.
For an obligation-free initial consultation, get in touch with Sonja today:
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