Growing your business by diversification
One way to protect or grow your business is to diversify. You may wish to look at ways of spreading the risk if you’re experiencing or expecting a downturn, or you may want to look at increasing your sales revenue and/or operating profit. Whatever the reasons you wish to diversify, you have essentially got three options:
- Find new products for existing customers
- Find new customers for existing products
- Find new products for new markets
Spreading your business risk across multiple offerings to multiple customers will help protect you to some extent against social and economic threats that are outside of your control but could nevertheless have a devastating effect on your business. This is because if you supply only one product or service and sales volumes fall, or costs significantly rise, your business is very exposed as it has no cushion of other income streams. If you have a variety of products or customer types these may not all be affected in the same way and you are therefore more likely to have alternative stable revenue and profit streams still coming into the business.
There are risks and rewards associated with each option. Here we give you some ideas on how you might approach each course of action:
Selling new products to existing customers
- Make full use of the knowledge of the market the competitors and your existing customers that you already have available
- Think how customers make use of what you’re offering and what else you could offer to increase or assist their usage
- Run a competition or a reward scheme for staff to encourage them to submit ideas
- Do some research with your existing customers – they may have some ideas too
- You don’t necessarily need to develop the new offering yourself – if you can source an existing supplier why not set up a resale or other relationship with them
Finding new customers for existing products
- Do you want to find new types of customers in the local area
- Or do you want to attract a similar profile of customer in a different location
- Test market to a number of different potential profiles and evaluate the results using factors such as ease of access to the customers, ease of sale, volume of sales and customer satisfaction
- Be prepared to do some research on the new area to understand any local peculiarities, limitations or particularly strong competitors that may affect your plans
Find out how many new customers you could be reaching with a Free data count from Sales Plus Consultants, then order your data for your marketing campaign.
Taking new products to new markets
- Generally viewed as the most risky proposition as it has the most unknown factors
- Will need careful research to establish whether there is a market and potentialfor profit
- Widens and therefore strengthens the base of your business
- Take care not to dilute your core product and existing expertise
Growing your business by diversification
One way to protect or grow your business is to diversify. You may wish to look at ways of spreading the risk if you’re experiencing or expecting a downturn, or you may want to look at increasing your sales revenue and/or operating profit. Whatever the reasons you wish to diversify, you have essentially got three options:
- Find new products for existing customers
- Find new customers for existing products
- Find new products for new markets
Spreading your business risk across multiple offerings to multiple customers will help protect you to some extent against social and economic threats that are outside of your control but could nevertheless have a devastating effect on your business. This is because if you supply only one product or service and sales volumes fall, or costs significantly rise, your business is very exposed as it has no cushion of other income streams. If you have a variety of products or customer types these may not all be affected in the same way and you are therefore more likely to have alternative stable revenue and profit streams still coming into the business.
There are risks and rewards associated with each option. Here we give you some ideas on how you might approach each course of action:
Selling new products to existing customers
- Make full use of the knowledge of the market the competitors and your existing customers that you already have available
- Think how customers make use of what you’re offering and what else you could offer to increase or assist their usage
- Run a competition or a reward scheme for staff to encourage them to submit ideas
- Do some research with your existing customers – they may have some ideas too
- You don’t necessarily need to develop the new offering yourself – if you can source an existing supplier why not set up a resale or other relationship with them
Finding new customers for existing products
- Do you want to find new types of customers in the local area
- Or do you want to attract a similar profile of customer in a different location
- Test market to a number of different potential profiles and evaluate the results using factors such as ease of access to the customers, ease of sale, volume of sales and customer satisfaction
- Be prepared to do some research on the new area to understand any local peculiarities, limitations or particularly strong competitors that may affect your plans
Find out how many new customers you could be reaching with a Free data count from Sales Plus Consultants, then order your data for your marketing campaign.
Taking new products to new markets
- Generally viewed as the most risky proposition as it has the most unknown factors
- Will need careful research to establish whether there is a market and potentialfor profit
- Widens and therefore strengthens the base of your business
- Take care not to dilute your core product and existing expertise