“So often people are working hard at the wrong thing. Working on the right thing is probably more important than working hard.” – Caterina Fake
Are you looking to diversify your small business?
Many businesses attempts to grow by creating different revenue streams or expanding their service offerings without asking themselves if these changes will actually benefit their business in the long run or realising that the act of increasing revenue will not necessarily grow a business.
A common sense approach to expanding a small business is adding products or services that complement existing ones. Such as a gym selling health foods or supplements. Offering completely different products or services, will most likely just confuse customers. For example, if Balance Books started selling website builds, this would likely confuse existing customers, which is not a great brand building exercise.
To ensure you’re ‘working on the right thing’ keep these key points in mind:
• Keep refining your core product until it is the best in the marketplace. i.e. never stop refining!
• If you do have multiple products or brands ALWAYS track each one’s profitability independently.
• Don’t confuse your existing customers with new, random product offerings under the same brand.
• Carefully analyse the effect of new products on existing ones, don’t cut off your nose to spite your face.
• Package goods or services up for a larger sale amount. We live in a super busy world, where time is a precious commodity. Give your customers a complete package, and everyone wins.
Most importantly remember this: revenue for revenue’s sake is not the way to go. Each offering to the market must be able to stand on its own, be profitable and not impact on the profitability of other products or services.