Originally posted on https://nancy-rubin.com/2019/02/11/why-business-diversification-is-so-important/
When you are starting a new business, it is great to land a large customer who gives your business a brilliant start. However, as time goes on this can be a problem as if they get into financial difficulties, they could take you with them. It is far better to have a lot of smaller customers as then if one ceases to trade, it will have less effect on your business.
There are many businesses that launch because of winning a large contract, but if they want to be successful in the long term, diversification is the answer.
Create New Opportunities
You need to create new opportunities for your business by introducing new products or services. It is worth investing in research and development to achieve this aim. This does not mean you have to have a huge budget; it is your time you need to invest. If you have employees, chat with them about the possibilities and see what new ideas you can come up with.
If you do not work with anyone else, then chat through some options with trusted friends and family. Talking with different people may well produce ideas you had not thought of.
Find More Customers
Once you have developed your new product or service you then need to find new customers for it. This is where a digital marketing agency could help, as they have the expertise needed to get your new products known as quickly as possible.
You also need to ask yourself if your business has the infrastructure to cope with an influx of new clients, and if the answer is yes, you diversification is more than halfway there. If new customers come quicker than expected and you find yourself and employees are overloaded with work, consider outsourcing some tasks to ease the burden, as it could be that after a while the orders will level out.
Your employees can be your biggest assets and generally, they will all pull together to get the work done. This is because is your business is doing well, they feel more secure in their jobs, and that helps them to be more productive.
Try Different Markets
Try to move into different markets to diversify your business. It could be, for instance, that your main customer focus is on selling a product to the younger generation. When you are considering your new products, think of something that will appeal to an older market. Then you will not be putting yourself in competition with your existing customers, and this could mean you have the best of both worlds. You could also move into the retail market with new products, which will mean you can make a higher profit margin than on the goods you sell to your large customer.
Running a business successfully is a lot of hard work, and you need to be flexible in what you do. You do not have to only sell one product or service, and diversifying into other areas could be the thing that secures your financial future.