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Is it time to diversify? Three tips to future-proof your business

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When it comes to business, the only guarantee is that nothing is guaranteed. Customers may seek out your products or services today, but that doesn’t mean that they will tomorrow. Getting to the top is one thing, staying there is another. To stay relevant, companies have to keep innovating.

In today’s tech-filled, fast-paced world, what’s trending now can be completely forgotten in a month’s time. And that includes your company. We all know how fierce competition can be, which is why diversifying can be a strategic way to future-proof your business.

Successful leaders never let themselves get too comfortable. They always push themselves and their staff to try new things. More important, they never stop hustling. As a leader, it’s your job to drive the direction in order to stay one step ahead.

By not relying on one particular product, industry or service, diversifying helps spread risk across your business. There are a number of ways to diversify and create additional income streams. Not only will this help you reach new customers, it will retain existing ones.

From opening a new location, expanding to international markets, adding a new service, introducing a different product line, or marketing to a different demographic, you’ll create opportunity. It may seem like a financial risk, but becoming stagnant is a much greater liability.

Whatever route you choose, always put a high level of market research into it. And don’t forget to audit your competitors and see if they’ve launched anything new. When you’ve landed on the right path, consider the following three tips to successfully diversify.

Complement your current offerings

If your company has been around for a while, you’re clearly doing something right. However, there are likely more ways you can branch out and expand your income. Poll your customers and talk to your team to see if there’s a gap that your company can fill.

Never underestimate the power of a good reputation. It will help you attract customers once you announce a new launch. For example, if you own a successful restaurant, consider expanding with a café, cooking classes or a retail product line.

Karm Sumal, CEO and co-founder of Daily Hive, recently introduced two new branches of his media company to include a digital marketing agency and an influencer management firm.

“If you have a successful business and want to diversify, always consider vertical integration,” Sumal said. “That way everyone involved will understand why you’re expanding. From your shareholders to your employees, it will be easier to get people on board and support the next steps.”

Create clear communication channels

Before you roll out the new branch of the business, consider how you’re going to structure it. Are you going to hire for new positions, or ask your current employees to take on new responsibilities? Will you require a separate retail or office space? We tend to only think of the financial implications, but there are a lot more factors you’ll need to consider.

Keeping all three companies under one roof has given Sumal the ability to monitor and step into each business when needed. However, it’s definitely come with its set of challenges.

“The core challenge is communication between divisions. We work in an industry that moves very fast and sometimes information flow can’t keep up,” Sumal said. “To mitigate this, we had to create more structure in terms of reporting channels, consistent meeting times and job descriptions.”

Also consider transparency. Keep your staff informed on what you plan to do, when it will happen and how they can take part. Excluding employees from the company’s future plans will create a distrust from the get-go.

Keep your culture in check

Diversification can be great for your culture. When a company is on a growth plan, employees have more opportunities to advance their careers. Being part of anything from the grassroots stage is exciting, so ensure you take your staff along for the journey.

However, it can also break a company’s culture. Leaders can experience inter-office jealousy, especially if all the budgets, time and resources are being spent growing this new area of the business.

“When any major change happens, you’ll need to keep a strong pulse on the corporate culture. It can easily shift in the wrong direction,” said Sumal. To do this, he regularly schedules one-on-ones with the management team, as well as consults with employees individually. Connecting with all levels of staff will give you important insights on whether your culture is taking a hit.

Mandy Gilbert is CEO of Creative Niche, a Toronto-based staffing, recruitment and executive search firm and partner of RED Academy, a design and technology school. 

Twitter.com/verynichey



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