Growing your business is no easy task. It doesn’t matter if you’re offering financial services or professional services or if you focus on healthcare or SaaS. If you want to take your business up a notch, you’ll want to set your goals, plan out your strategy, and consider all options.
One of the many ways you can start growing your business is through diversification. Diversification refers to the process of taking new risks so that you can access business growth. Some do this by creating new offers that complement their existing products. Others go for an entirely new product line. It can help you access a new market or bring more value to your current clientele.
Are you not sure how to start using diversification as your way to boost business growth? You can always hire industrial marketing consultants to help you out. But the question is, is diversification worth the risk? The following enumerates some of the best reasons why diversification is a good way to start growing your company.
Add multiple revenue streams
Let’s say your business relies on a product to generate more than half of your business revenue. What if a new competitor emerged and offered a better version of what you have? Chances are, consumers will try out your new competition, which will then lower your sales. By adding a new product or services, you can have an extra edge and fight off your competition.
Take advantage of the opportunity to partner with other local companies
Diversifying your business will not only help you bring more revenue to your company. But it can also help form strategic partnerships with other companies in your local community. That is true if you are adding completely new products from your usual offerings. It is what we call conglomerate diversification. It can create unlikely partnerships with businesses that are unrelated to your current one.
Avoid dependency on a single supplier and customers
The great thing about diversification is when you make a new offer, you will most likely need to work with other suppliers to craft your product. That allows you to find a more reliable supplier who offers better service at a competitive rate. Likewise, you get to access a new market, thus catering to other customers. If in case, some of your most valued clients will no longer support your products, you’ll have other target populations to offer your products to.
Take advantage of cross-selling your products
Making new products to compliment your current ones allows you to cross-sell. Cross-selling refers to a marketing strategy that enables you to sell more to your current and new clients. You can use the new product to give your clients additional benefits while increasing your earnings. You get to retain your clients and keep their loyalty all the while you enjoy more profits.
The diversification indeed has its risk. However, if you wish to grow your business, you will eventually need to make more decisions and take more risks to achieve your goals. That is to say that diversification is not for every business. Know your objectives and take into consideration the pros and cons of diversification. Doing these can help you determine whether you can use this strategy to boost business growth.