Before I get started, let me say that diversifying your business does not mean that you have multiple businesses that you run. Being a serial entrepreneur is different than having one business with multiple streams of income. Please note that I am talking about the latter not the former! Now that we have cleared the air, let’s talk!
Gone are the days of having one big client and one service or product to make you successful in business. Yes, you can make quick money doing anything. Long term success? Not so much. Especially in this economy, small businesses need to find ways to create multiple streams of income. This can be done through diversification. For the small business owner, this means creating or offering new products and/or entering new markets.
Sometimes you can offer various product types and forms. Think of an author. Their one book may come in audio, e-book and print. Those are various forms. But they may also take that same book and make a workbook, create a video series, or offer seminars. This is routinely known as repurposing content. This is a quick and easy way to diversify product.
Virtual vs. Physical. There are some that only offer online product and some that offer physical product. Another way to diversify product is to create something new that fits the same type of audience. Take that same author, as discussed above. Now let’s add wearables. T-shirts, mugs and bling that may pair well with the current audience and create a new audience.
Yes, I know that you have spent several months, maybe years figuring out your target audience, but you can have more than one. That is especially true if you have multiple products. Different people react to different products. But think about how you can reach a different audience. If you only offer products and services to women, can you also offer it to men? Or, can you segment your audience. Business women vs work at home mom, etc.
There are business, friends and business partners. Then there are strategic alliances. The concept of alliances (aka joint ventures) is usually limited to, marketing when it comes to small business. But you can use them for so much more. How about packaging your product or service with another company? Even if you take a little less money per unit, you can make that up with volume. In addition, you can consider licensing your product or service or vice versa. This will allow you to use another business or brand to grow your customer base and expand your revenue. It also increases the ways that your business makes money.
Ultimately, your business can survive the ups and downs of the economy if it is successfully diversified. You do not have to offer 100 different products or services to be profitable. What is necessary is that all of your income is not coming from one particular source. Whether it is a product or client, if one goes belly up, you should be able to rely on something else to keep the business afloat.
Shahara Wright is an experienced and highly sought after business law attorney and business strategist. She is the author of From Entrepreneur to CEO and host of the CEO Collaboration Circle. Shahara founded The CEO Effect, LLC to work with small business owners who want to implement strategy to build capacity.