How diversified is your business? This can be a very loaded question depending on how you look at it. However, the trials and tribulations of the past year have caused many business owners and entrepreneurs to ask themselves and their friends this question. Odds are, you will ask and answer it very differently from the entrepreneurs around you. In this article, we’ll look at what it means to diversify your business and why you should be prioritizing diversity across multiple fronts. We’ll examine the impact of diversifying your assets, your strategies, your employees, and even your thinking. By learning to invest your eggs into different baskets, you can protect yourself and your business from floundering universally and create a more stable network of income.
What is the point of diversifying your business? Over the length of this article, we will go into greater detail about why you should think diversification for your business from multiple angles. However, let’s first discuss what it really means to diversify.
Simply put, diversification is doing something differently from the established or innate pattern. To diversify successfully you must do so intentionally. Diversification is a way to train your brain and your business to think outside of the box. Rather than pursue the same old, same old status quo, you are pushing your business to grow and to spread its resources (and hopefully its successes) to new areas.
Diversifying a Single Business
How do you diversify a single business? Often, diversification within your business may not feel like grand gestures of change or exciting new ventures. Diversifying a single business is frequently about finding new spins on existing products, processes, or projects. It often won’t be as easy to think up as investing your money into a different industry or opening up another kind of business, it’s more about finding new ways to extend the capabilities of your business and appeal to more unique customer/client demands.
Diversifying your business can be done by looking for new ways to offer existing products and services, such as bundling or offering subscriptions. It can mean looking for new markets to tap into or searching for partnerships that can benefit your business while helping out another. Diversifying a single business isn’t about stretching it beyond its capacity, but about making sure that you are getting the most out of the assets and structures that you already have in play.
Expanding to Multiple Business
Whereas diversification within the confines of a single business is about filling out, diversification between multiple businesses is about expanding and reaching into new areas of potential revenue and growth. Diversification across multiple businesses helps protect you from setback when an industry is in decline; or, in the case of the pandemic, shut down entirely. This can be something as simple as opening the same business in two different cities or as complicated as investing in dozens of industries.
Diversification across multiple businesses can be much more obvious than trying to diversify inside a single business because you can be open to virtually any idea. However, it is important not to overstretch your knowledge and personal responsibility. Do not dive headfirst into an unfamiliar business model or industry just because it is different. Make sure that you take educated steps and apply your skillset where natural fits exist. You can succeed in other industries and with other business models, but make sure that they are the right fit for you.
Diversify Your Marketing
Diversification does not just mean that you are pursuing new sources of profit. Many times, it means that you are seeking alternative methods of seeking similar results. Diversified Marketing strategies help your business to cover more digital and physical ground. Not every customer can be reached in the same manner.
Older customers will gravitate towards physical platforms such as newspaper or television ads, and social media platforms such as Facebook. Younger users will gravitate towards digital platforms such as YouTube and social media platforms such as Twitter and Reddit. And within these generic marketing distinctions, there are thousands of other refining qualities that will make it virtually impossible to land your business in front of all of your target market with just one strategy.
The only surefire way to reach the ceiling of your target market is to reach out with a diversified marketing strategy. Do not fixate on one platform or one website. Don’t even fixate on one ad type or style. Think differently, market towards different platforms, and reach out with the full extent of your business.
Diversify Your Training
Where did you pick up your business acumen? Were you professionally instructed at a college or technical school? Did you learn on the job? Are you self-taught through books and online courses?
These are all valid options towards becoming a business expert, but no method is foolproof. Each learning method comes with its own unique set of strengths and weaknesses. The best way to make sure that you are protected and best informed is to diversify your business training. If you learned on the job, it might be beneficial to learn professionally from a degree or even a few courses. If you learned professionally, self-taught books and courses can help round out and specify your knowledge.
The best way to keep yourself ahead of the educational curve is to continually pursue your education and to make strong attempts to diversify your business education.
Are you employing homogenously?
Do your employees all think alike? Do they behave and perform their jobs in identical manners?
Uniformity can be a great asset to your employees. It makes sure that the job gets done in a similar manner and that everyone can easily be kept on the same page. However, a company that is too homogenous in its thought the process can easily become entrenched in the same old routine and can quickly fall behind the competition.
Successful companies that continue to succeed and grow need to do so through a reasonable level of tension. This comes through intentional hiring in people that have diverse technical and ability-based backgrounds. You want people who can come up with opposing ideas and find the best solution in between them. You want people who will pursue different avenues towards success and be able to challenge one another when need be. This healthy discourse creates reliable and ground-breaking discussion for those at the table.
Diversify Your Goals
What do you want out of your business?
If your goal is simply to grow and make more money, your priorities might not be in the right place? Or perhaps you are satisfied with where your business is at and are simply unsure of what to do next. Diversifying your goals can help your business succeed on multiple fronts and can help push your team towards their best work.
Ways of diversifying your goals can be focusing on internal goals such as streamlining employee processes, developing new products or services, or simply growing your team. External goals can be spreading into new markets, developing new partnerships, or getting feedback from the community and clients. Diversified goals help keep your business moving in a positive direction and provide an opportunity for everyone within the company to contribute towards something more meaningful than their day-to-day operations.
Staying Focused while Diversifying
There can be such a thing as too much diversification. The last thing you want to do is to stretch your team and your organization beyond capacity. Biting off more than you can chew can quickly become a downfall for your business by tarnishing customer and employee relationships. The best way to ensure that this doesn’t happen is to remember the mission of your business or even your personal mission in the case of diversification between businesses. At the end of the day, all of your attempts for a greater asset, employee, investment, and all other kinds of diversification should contribute towards the mission of your business. If these attempts do not contribute towards that mission, then they are likely to be irrelevant. Forward movement for the sake of movement does not build a healthy business, it causes it to trip up.
Diversification can come in many different forms. The key thing to remember is that diversification helps you grow the health and wealth of your business when done appropriately. Diversification helps provide stability by ensuring that your revenue is not tied to a single source or stream. It helps create intelligent discussion that challenges your business while pushing your employees to think outside the box. It helps grow your business by tapping into new and exciting outlets within the industry. It helps you expand your customer base and reach the largest potential audience. In short, diversification helps create a stronger foundation for your business and greater security for you as an entrepreneur.