How to diversify your business

Many great businesses have multiple sources of income, and the benefits of diversification were fully and firmly substantiated through the recent epidemic shutdowns. Now as a lot of business owners are beginning to emerge from the COVID-19 lockdown concerns about futureproofing are being asked. How can you get your business thriving again when the borders are closed? Do your current offerings be relevant in the current normal‘? Most importantly is how do you get prepared in the event that we are forced to enter lockdown again? The answer may lie in diversification of your business.

Why diversify?

Experts have seen play out during the first half of the strange year that has been 2020.

Diversification of business operations is a method to lower your risk while operating within an unpredictable economy. It’s a sign that you have a backup plan should anything go wrong.

Diversification helps you protect yourself not only from unanticipated shocks , like COVID-19 as well as from more familiar problems like when competitors come along.

There are plenty of diversification opportunities out there but says there’s plenty to consider before deciding to dive in fully.

We wouldn’t advise anyone to embark on a journey to do something crazy – like invest lots of money on something that you’re not familiar with. If people consider their current work environment and know-how - there are always other areas that they’re not obligated to be in which could offer enormous opportunities for them since it’s not yet their normal space.

Getting started

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

Know where you’re heading and who your competition is especially if you’re going into a brand new market.

In this case, if you’re making machinery for the food industry, then a safe source could be consumables. In a strong economic environment, the machinery will be selling and is in high demand, however in a less so good economy, like today, people are still buying the consumables.

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

It’s recommended that you remain with the things you are familiar with, especially if this is your first time dipping your toes in the pool of diversification.

If you’re seeking to diversify into a field that’s not within your capabilities or your knowledge in business it’s best to consider hiring someone with the experience. There are many things and not so good in other areas. So, hire people with the expertise and experience you need. If you don’t have it, you’re just adding to the risk.

Risks to consider

Diversifying your business means diversifying your attention.

Your goal is to please the customer and increase your customer base. This means that the issue you face when diversifying your business is that you’re putting in people to create your new service. If you’re not carefulyou’ll will end up spending all your staff on the new opportunities , leaving the old ones behind.

It’s vital to ensure you’re satisfied with the customers you already have while growing that customer list.

Do not chew more than you’re chewing.

Be smart about taking your time to accomplish this. I’ve seen thousands of businesses over the years who go broke because they did an unwise thing… and that includes the biggest, most intelligent ones.

That’s the challenge of being a small business owner, he says. There are many of the same challenges similar to big corporations, but with less resources to react to and repair your mistakes, therefore you must be cautious.

Any change in business or investment in business is an investment that is risky, however you can take some good risks and make some truly smart choices, and earn you a significant amount of money and succeed… provided you’re smart about it.

Scooping up opportunity

Diversification was an essential requirement for some business such as the gelato maker who works mostly as a wholesaler for restaurants and sellers of gelato. But by February of this year, the company was beginning to notice problems appearing ahead.

"I wasn’t sure it would affect us in any way, based on the news coming from out of the country"

However, one of their main customers, whose business relied heavily on overseas tourists was unable to fulfill orders.

At this point they were a week into lockdown , and they realized that they required a diversification strategy if they were going to be able to get through.

"I started to look around for any other businesses that we could buy that might complement our current business"

"I found another company which was actually supplying supermarkets. I began looking into buying the majority of the business on lockdown, and eventually bought 50percent of the business."

That move didn’t just open up a new customer base; it also allowed them to enter into new business.

"Their manufacturing was done by an unrelated contractor. Thus, by purchasing it, we’ve taken over the manufacturing contract"

"If we enter another lockdown or something else happens it’s still the grocery side of the business which will continue."

It was the perfect example of a business taking an opportunity to grow on its strengths that its already has.

It can feel like a do-or-die scenario. However, over-reacting to situations could harm you in the end.

"Part of the issue is that, when people get caught in trouble, they take the wrong choices. Particularly now, with the effects of COVID-19" the expert states. "So my advice is to seek non-emotional advice from someone who isn’t directly connected to your business.

"If you’re struggling emotionally or financially and stress is piling up, it’s time to seek help. Take the phone and speak to someone. There are lots of clever people out there who can aid, so don’t take on the whole thing by yourself."