Growing Your Small Business: Have the Vision to Diversify

No matter how small or big your business is, thinking outside the box can keep you growing.(Giggsy25/Shutterstock)

You did it. You own your own business, and you’re the boss.

It’s a healthy business and doing well. But what’s your vision? If you max out on your core business, what’s next? No matter how small or big your business is, the need to think outside the box is essential.

Think about your short and long-term goals. How can you diversify and grow so you don’t have all your eggs in one basket?

Companies That Diversified: Household Names

Amazon is a household name. It sells everything from mousetraps to clothes. But do you remember how it started? Jeff Bezos started Amazon as a virtual bookstore. Bezos built the software for the website in his garage, and went on to compete successfully against local and national bookstores.

However, Bezos went beyond selling books and diversified into selling other products. That, of course, opened up new lines of revenue. Amazon still sells books, but it’s much, much larger than that.

My Pillow started when Mike Lindell mortgaged his home to develop his first, hand-sewn, pillow. Through infomercials, he took his company from five employees to over 1,500. But he didn’t stop there. He diversified and now sells sheets, slippers, and other items.

Small Business Diversification

Although these are great examples, you don’t have to be one of the big boys in the business to think about diversification. Any size business can identify another revenue source and expand.

For example, a man near retirement moved to a barrier island in the southeast United States. He and his family decided to start a cleaning company for various local homeowners. Besides homes, they also started cleaning the island’s abundant vacation rentals.

Eventually, they reached a point where the company’s growth had slowed. They started wondering how they could expand. It was time to think outside the box. It was time to diversify.

From House Cleaning to Hurricane Prep

The barrier island was in a hurricane-prone area. The company was often called in after a storm to clean up the mess. Often, the mess was because homeowners had not properly prepped their homes. The business owner took note of this. What if the houses were prepped for the homeowners? All the owners would have to do was to leave, knowing their homes would be made ready for a storm.

The cleaning company started a new division that prepped homes for hurricanes. Its services included boarding up windows. Customers were charged a monthly retainer fee; therefore, there was steady revenue coming in all year.

Since the company already had a customer base from its main business, it was easy to market the hurricane prep service to existing customers.

The company acquired new customers as well. These new customers eventually signed up for routine housecleaning. Thus the company was able to grow both its core business and its new one.

Know Your Core Customer

How well do you really know your business? Along with knowing your business comes knowing your core customer. Identify who your customer is. You might be able to diversify your business by diversifying your customer base.

Don’t keep going back to the same well. If you want to grow, you need to diversify your customer base.

For instance, if your customer tends to be 45 or older, analyze your services or product. Can you make an adjustment to attract millennials? Or, look into changing your marketing strategies.

Identify a Need

What needs do your primary customers have that must be filled? In the case of the cleaning company, the owners recognized a need among their customers during hurricane season. They thought outside the box—merely cleaning homes—and filled the unmet need.

This same company eventually saw that its customers needed lawn care, and it filled that need too.

Have your customers changed their routines? For instance, if your customers aren’t visiting your brick-and-mortar store as much as they used to, maybe it’s time to look at e-commerce.

Talk to Your Customers

Don’t be afraid to simply ask your customers how you can better serve them.

One business owner did just that. He had a home and sidewalk power-washing company. While talking to a customer one day, he discovered that the homeowner needed someone to wash windows and clean gutters as well. The lightbulb went on in the owner’s mind. He could diversify his business.

A lot of people avoid power-washing in the fall. It’s more of a spring business. However, cleaning gutters for winter is often done in the fall. By offering the additional service, he could bring in revenue at other times of the year. He could work around the seasonality that was limiting his business.

Further, window washing, especially washing windows indoors, could be done anytime. The added services would help maintain a consistent cash flow.

This savvy business owner now offers a complete package of these services, and has increased revenue for his company.

Partner With Other Professionals

You don’t need to go it alone in order to diversify. Look at the services you offer. Could you augment them with services from someone who has expertise in an adjoining field?

For instance, if you own a nail salon, you might want to team up with an aesthetician to offer facials. Now, you’re creating a more rounded experience for the customer. This adds to the bottom line.

A restaurant may want to hire a nutritionist and advertise this service along with its healthy choice menu. Adding choices will cater to both existing and potential customers. It will also add additional revenue streams.

If you take this route, there is a key factor to its success. Partner with someone who shares your vision and doesn’t try to divert you from your goal.

Diversification Takes Vision

Look beyond what your business currently is doing. Ask your customers: what do they want, that you are not currently offering? See their needs, then respond to them.

As part of your diversification, look for trends. Fads are best avoided. But if you note that cycling is growing in popularity, and you’re a fitness equipment company, consider expanding along with that trend.

Don’t be afraid to step back and look at the landscape. Have the vision to see what product or service is a fit for your company, and then go for it.

The Epoch Times Copyright © 2022 The views and opinions expressed are those of the authors. They are meant for general informational purposes only and should not be construed or interpreted as a recommendation or solicitation. The Epoch Times does not provide investment, tax, legal, financial planning, estate planning, or any other personal finance advice. The Epoch Times holds no liability for the accuracy or timeliness of the information provided.