Thinking of diversifying your business? These tips are for you.

rhelmzrt Tips for growth 0

Business diversification is about growing your business by getting into markets and offering product and/or services than what you are currently offering. Many businesses have been forced to diversify due to the COVID-19 pandemic. As markets continue to shrink, businesses must think outside their normal offerings for survival.

Before the second lockdown, Violet used to run a bakery and a small laundry service on the side. When the country went into lockdown, she realized that it would be hard to continue running the bakery because raw materials were scarce. She decided to put more effort into the laundry business by adding pickup, delivery, and pressing services.

Violet’s model of diversification involved building onto an already existing service. The path you choose will depend on your circumstances and the kind of business you run. Here are some tips to consider:

1. Reflect on the value-add

What value does your new product/service bring to the consumer? Take time to assess whether your new offering is actually needed. This will determine whether you will get customers or not. One way to do this is by looking at customer feedback on your current offerings. What needs and gaps have they expressed and how can you address them? Would a new product/service respond to those needs?

2. Do your research

You need to be well informed on the kind of products/services and markets that you want to venture into. This involves finding out who your competition is, similar products already in the market, who is likely to buy your products, and what you must do to win over customers.

3. Look into the resources you need

Carefully analyze what you will need in terms of expertise, money, connections, and time to bring the product or service to market. This will help you assess whether you have the core resources to start production or service delivery. As you plan, think of what resources you are missing and where you can get them from. For example, are there local experts that you could tap to help you start?

4. Plan operations

Operations involve production, sales, and marketing, among others. It refers to everything that you will need to do to make the business work. You need to figure out how the business operations will run. If you are going to rely on existing systems, what impact will that have? Will it strain human resources? If you decide to use the team that you already have, consider briefing them and ask them to provide feedback about the proposal and how best it can work.