How to make your business more diverse

Many successful companies have numerous sources of income, and the benefits of diversification were amply emphasized by the recent pandemic shutdowns. Now, as many entrepreneurs begin to emerge from the COVID-19 lockdown concerns regarding futureproofing are discussed. What can you do to ensure that your business back on track when boundaries are shut? Do your current offerings be relevant in the current normal‘? Perhaps most important is how do you get prepared in the event that we are forced to enter lockdown again? The answer might lie in diversification for business.

Why diversify?

Experts have witnessed unfold throughout the first two months of the year that has been 2020.

Diversification of your business is a way to minimize your risk when operating in an unpredictable economic environment. It’s a sign that you have a backup plan in case anything go wrong.

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

There are many diversification opportunities to choose from, but plenty to be aware of before deciding to dive in fully.

We’re not suggesting to anyone that you go out and do anything crazy, like spending large sums of money in something you are just not comfortable with. If people consider their current business environment and expertise - there are always peripherals around that they’re not necessarily in, which are huge opportunities for them, because it’s still within their comfort zone.

Getting started

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

Find out where you’re going and know who your competitors are especially if you’re going into a brand new market.

As an example, if you’re producing machinery for the food industry, then a secure place to go to might be consumables. In a healthy economic environment, the machinery will be selling however, in a not that good economy, as the present, people are still purchasing the consumables.

In the event that you do not have expertise of the market that you’re trying enter, it’s like driving on the road with a blindfold on.

It is recommended to remain with the things you are familiar with, especially if this is your first time trying your toe in the diversification pool.

If you’re considering diversifying into a market that’s outside your skillset or business knowledge, then you need to consider hiring someone with the knowledge. There are many things but not as good at others. Therefore, you should hire employees with the experience and expertise you require. If you’re not able to do that, you’re just adding to the risk.

The risks to be considered

Diversifying your business involves diversifying your focus.

Your aim is to satisfy your client and expand your client base. This means that the issue you face when you diversify your business is that you’re putting in the resources of your current offering. If you’re not careful, you end up using all your staff on the new opportunities , and leaving the existing ones in place.

It’s incredibly important to make sure you’re satisfied with the customers you already have and growing those who are your customers.

Do not chew more than you’re chewing.

Be smart about taking your time in doing this. I’ve witnessed a lot of companies throughout the years that go broken because of doing the wrong thing… all the way to the most reputable, well-known ones.

This is the problem of being a small-scale business owner, he adds. You have similar problems that big companies face, however, you have less money to respond to and repair your mistakes, therefore you need to be careful.

Any change in business or investment in business comes with an investment that is risky, however you can take some excellent risks and make extremely smart decisions, earning you a significant amount of money and be successful… if you’re smart about it.

Scooping up opportunity

Diversification became an imperative for some business such as one that makes gelato, which operates principally as a wholesaler to eateries and vendors of gelato. However, in February of this year, had begun to notice issues appearing ahead.

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

However, they noticed that one of their major customers, whose company relied heavily on foreign tourists had stopped taking orders.

At this point, they were one week in lockdown and realized they needed to have a plan of diversification in order to survive.

"I started looking around for other companies we could acquire that could be a good match to our current business"

"I discovered a different business that was actually providing to supermarkets. I started working on buying the business during lockdown, and eventually bought half of the business."

That move didn’t just open up a new customer base. It also allowed them to take on new business.

"Their manufacturing was handled by an outside contractor. Thus, by purchasing it, we’ve actually taken over their manufacturing contract"

"If we enter another lockdown, or something happens and something happens, we’ll have the grocery side of the business which will continue."

It was the perfect example of a business taking a chance to build on the strengths it already had.

It can feel like a do-or-die scenario. But rushing into things could harm you over the long term.

"Part of the problem is that when people get out of the woods, they take mistakes. Particularly now, with the effects of COVID-19" the expert states. "So, my advice is to seek out non-emotional guidance from someone who isn’t connected to your company.

"If you’re experiencing emotional distress or financially and the stress is piling up, it’s time to get some help. Take the phone and talk to someone. There are many smart individuals who can assist, so don’t try to do it all yourself."