To Diversify or Not to Diversify

For many entrepreneurs, the lure of multiple income streams can be irresistible. In all honesty, I have been one of those people who always looked at the ways I could generate income in different ways, and now I know that was the absolute wrong thing to do.

Taking a step back and reflecting on the whole diversification approach it CAN have short-term gains it can also cause long-term problems. The short-term benefits are mostly financial, but realistically this short-term financial gain mindset is the precise reason why so many small businesses fail after a few months or years in operation.

To be truly successful businesses need to look at what their long-term aims and objectives are and build a sustainable plan around that. A fundamental part of that sustainability is a robust client pipeline.

So how do you build a robust client pipeline? Trust is a fundamental part of the process.  People have to trust you and your brand. They need to see you as credible in your field, and they have to know what you stand for. By diversifying your business offering, you risk losing credibility as you appear to veer from product to product or service to service without mastering any particular thing. Think Jack or Jackie of All Trades!

If like me you recognise this behaviour it is time to step back and do the following evaluation:

  1. Go back to your business vision – what are you trying to achieve?
  2. List everything that you could do. All your ideas, potential products, and schemes.
  3. Create networks of ideas that fit into common themes.
  4. If financial growth is one of your aims, then assess the profitability of each of the themes.
  5. Assess your passion/enthusiasm for each theme.
  6. Consider whether you have enough passion and enthusiasm for all the recurrent theme while also considering its ability to generate income.
  7. Choose one theme to focus on.
  8. Evaluate your business to see whether your messaging and approach fit with that theme.
  9. Make changes to your business to reflect your primary purpose
  10. Continually evaluate and reassess your passion and the profits being generated to make sure you are still in the right business

Because frankly once you start offering add-ons and extras you run the risk of becoming like McDonalds, and you may as well ask your clients “Do you want fries with that?”

 

About the author

Roianne Nedd is an experienced coach, consultant, and business advisor.  Having founded ROI Jelly Ltd in 2014, she works at both ends of the commercial spectrum assisting start-up companies and would-be entrepreneurs to transition from employment to business as well as advising large public and private sector organisations including a number of FTSE 100 companies.

For a no obligations consultation or to find out more about what she and her team can offer email hello@roijelly.com

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