Not All In One Basket: How To Diversify Your Business

woman watering plants in garden

A lot of new businesses have a notable point of failure: they offer only one product or service. While this can be a great idea for startups, you need to be able to do more. Depending on a single offering to the market can mean that a single change can have your business failing. For example, the former cellphone giant Nokia may have dominated the market but was left behind when the market shifted to smartphones. If they had other things to offer, the business would likely be as strong as ever.

But diversifying can also be risky. Diversification can easily fail when Coke decided to bring out New Coke. This failure can cost you a lot of money so to help avoid that, here are some tips to help.

Identify a Niche To Fill

One of the first things you should do is to start looking at your current markets for a need you can meet. You can find out what the market needs with some heavy market research. This should reveal potential niches that you can fill with your offerings. For example, if you are a gardening store and you find out that no one is offering a sod supply in the local area, then you should start offering it. Locals will look to you for convenience. Additionally, if you price it right, you should have some good results.

Keep On Innovating

You can also diversify your products by developing new ones. You will have to spend money on R&D, but it can be worth it if you develop a new offering. But you don’t have to go that far. You can still offer new products by offering upgrades to your old ones. For example, Apple has been offering personal computers for years now. But they have been developing and improving it to match other options on the market. You can use a similar strategy for your products. The important thing is to remember that you have to offer more value to the customer in each upgrade.

Use Your Strengths

Your current business likely already has some foundations for offering new products. For example, if your company already has a robust online infrastructure, then you should consider using that as your platform for selling your new products or services. It also might surprise you at what can translate into your new market. For example, companies that have experience with deliveries can leverage that knowledge for better product distribution, no matter what field is.

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Look For New Markets

Besides new products, there is also another direction in which you can diversify your company. This is by finding new markets. Instead of adding products to your local market, you will be looking into breaking into a new one. This can be difficult. You will have competition already in place, and you will be looking to get some of that market share. For it to succeed, you’ll need to do some major market research and maybe even doing some innovation. For example, McDonald’s started in a single part of the US. Now it reaches all over the world. This means that if it is doing badly in one market, it can make up for it in another one. But it was not easy to get this worldwide reach. The company had to modify recipes and menus depending on the markets they were entering. You should do something similar if you want success.

With a diverse offering of products, you will always have something to fall back on. Additionally, it can provide multiple streams of revenue that can only reinforce the growth of your company. Expand and diversify, and soon your company will become a strong operation that can weather any storm.

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