Business diversification refers to the expansion of a business into a new area. This can include the development of new products or services or entering new markets, where this growth requires different knowledge, skillset, technology, or manufacturing techniques.
A business may choose to diversify for many reasons. One reason may be that the current market is satiated and offers no further opportunity for growth. Another reason may be to take opportunities for more profitable growth.
To be a successful in today’s market, business diversification is essential. It is a development strategy which will reduce risk and maximise income.
Why and how to diversify
In today’s ever-changing world, businesses need to implement an “adapt or die” approach. A company must be flexible, agile and have the ability to change direction depending on global consumer trends. Here are three ways to diversify your business for today’s world.
1. Keep your product open to diversification
At the outset, it is best practice for a business to launch with a clear focus and small product line. However, a business should consider the ability to diversify their product or service should the opportunity arise. On a small scale can occur by producing and/or selling related products. Having the ability to change and develop easily from the outset will improve your chances of business growth and increase revenue in the future.
2. Reach different audiences and markets
Businesses should not only be aware of the demographics of their target audience and carry out regular research in order to understand the needs of the consumer but also use the findings of such research to implement a strong marketing strategy to boost the business or brand within different audiences and markets.
Social media is likely to be the most effective way to reach new and global audiences. Create great, engaging and informative content across the social media channels most suitable to the business in order to reach your desired audience, using relevant hashtags. Build relationships with content creators and influencers that reflect the target customer. There is also the option of targeted ads.
3. Diversify of your traffic sources
It might seem self-explanatory but there are many different answers to the question: how do I generate traffic to my website? The answers of course depend on a number of factors but primarily on the type of site one is running and its business model. While a website selling physical products (like an e-commerce) and/or virtual services might be more inclined to go down a path of brand-building and therefore expect a good chunk of their target audience to reach their site through direct traffic (i.e. users typing the website’s address in their browser), online/offline advertising and social media, in other contexts such as the affiliate market, made up of websites referring traffic, via engaging content, to other sites selling the actual product or service, SEO is the name of the game.
Regardless of the specific business model or niche, one rule applies to all: limiting your own potential traffic sources to just direct browsing, referrals from other site or organic traffic (aka SEO) is never a good idea. In essence a business should not put all their eggs in one basket. Let’s consider the fact that the various “channels” generating traffic to a site do not operate in isolation but are all intertwined. Thus, an eminently SEO-led endeavour such as building site authority through the endorsement of other sites can easily transcend its “natural” realm and become an act of brand-boosting. The expert hands of a link building agency have the capabilities of connecting with many high-authority publications such as online newspapers, magazines and blogs to acquire a backlink capable of reaching the target customer, referring thousands of users back to your website and ultimately expanding your traffic sources.
Implementing these three strategies will help a business to diversify. It will reduce the element of risk and lead to a more robust model with a greater ability to adapt to market changes and turn them into advantageous opportunities.