An essential skill needed to be in business today is the ability to see an opportunity for growth. While there is value in specializing in one signature product, it’s necessary to keep an open mind about when and how to expand your offerings.
If given the right amount of thought and effort, creating a range of products won’t have the impact of diluting your brand. For example, if you make custom leather bags, you could explore the possibility of extending your collection to include shoes. You may need to look for expertise outside your business and find a partner with the skills required to diversify. This can be unsettling when you’ve spent years distinguishing yourself, but company growth comes with taking calculated risks. With the proper contracts in place, you can maintain your company’s identity while establishing mutually beneficial business relationships.
In this article, we’ll look at why diversification is necessary for the long-term survival of your business and how you can successfully branch out.
Being able to offer clients variety indicates that you’re invested in the growth of your business and can inspire customer loyalty. By evolving as a company, you keep your staff motivated, challenged, and distinguished as a company that people want to work for. Extending the products and services you offer depends on your personal appetite for risk and the finances available to make the changes.
How you can secure your footing in the industry by extending your services.
- Creating customer value – By expanding on the products and services you offer, you create more options for your clients. The aim is to establish a ‘one-stop shop’ where clients have the convenience of purchasing your main products and the ones related to them. For example, if you sell craft paints, you could also provide paintbrushes and easels.
- Increasing customer base – Having various products at different price points can increase your customer base because you have something for different budgets.
- Attracting new talent – Besides demonstrating to your current employees that there’s room for growth in your expanding company, you’re also creating the opportunity to recruit resources with the capacity to turn your ambitions into reality.
- Building on your company’s strengths – Although being proficient in making a product or delivering specialized services is key to your company’s success, it doesn’t guarantee the sustainability of your business. Riding too long on your company achievements leads to stagnation, where the evolution of your business depends on recognizing the next opportunity for growth.
- Establishing business stability – Most markets rise and fall, and you will notice trends in your industry. Diversifying alleviates some of the pressure of staying afloat when business is down.
As a business owner, you need to be flexible in your approach to adapt to change in the dynamic world of business.
How to pursue different revenue streams
Having successfully established a company, you should be able to identify gaps in the market, which is a skill you need to ensure the longevity of your business endeavors.
Let’s see how you can channel your efforts to close these gaps to offer an in-demand product or service.
Diversifying your product
You should do this based on the experience you’ve accumulated over time. You will have identified areas of improvement to position yourself to do better than competitors in the market. Enhancing operations and implementing new methods to deliver an optimized product or service is what will set your company ahead of other industry players.
Extending your services
Offering a one-time service to your clients could add the type of value that ensures that you get return business from them. For example, if you’re a gym owner, you could offer a free session to one of the classes to entice people to join. Another way to ensure a steady income is to offer a subscription where, for example, customers pay a monthly fee to access certain services. You can also generate additional income by posting videos, like online tutorials related to your product or service. For example, if you sell wooden furniture, you could provide instruction on how to maintain it.
The COVID-19 pandemic has forced businesses to adapt because of the lockdown and social distancing requirements. We have had to look at new ways of doing business. Whether you’re in the business of selling products or providing a service, the web has become an inevitable tool where companies have set up online stores. Even services such as psychology or legal advice can be delivered using online platforms.
Leverage your resources
It’s essential to your company’s sustainability to set aside the time to identify new areas for growth. You can identify personnel and set up a team whose role is to discover new opportunities if you have the human resources to do so without compromising the existing business. Companies that have set up their own research and development teams exemplify how a concerted effort is necessary to inspire innovation.
This method of creating interest in your company and what it offers involves forming partnerships where you promote each other’s products and services because you’re in related fields. If you manage to secure business for each other, you generate an additional income stream from getting a commission. One could look at this as a sophisticated form of networking.
You don’t want to be a jack of all trades because you value having a specialized brand. Still, it is necessary to try different avenues to increase your company’s profitability. Diversifying strengthens your company’s position in the market by having different sources of income that can lead to business stability and growth.