One question weve found many small businesses can struggle with is whether to specialise or diversify. Diversifying can help boost your business while specialising in a particular area can also reap great rewards, so weve put together our advice on choosing the right path.
As a farmer-turned-entrepreneur, when we started to manufacture and package our vegetables to provide convenient meal accompaniments, little did we know this simple concept would attract global attention. As demand grew it became clear that we needed to develop our product range to ensure that we remained ahead of the curve and in line with what our customers need.
Dont put all your eggs in one basket
Weve all heard this expression and for many small business owners this is key advice in order to help decide which direction to take. We started selling our core range of Mashed Potato, Carrot and Parsnip as well as Mashed Turnip but after nine months we noticed additional opportunities available in the wider category. For us, the need to diversify our range was clear and so we started to produce our award-winning Vegetable Burgers.
Filling this gap in the market and diversifying our range ensures that our products are on the shelves all year round, helping to boost our business. For others, specialising in a particular area can help you carve out a niche in the market and position yourself as the leader in your sector. While there are still growth opportunities in your field, the depth of experience you have for customers is second-to none and your unique selling point stands out from the crowd.
Read more about business growth:
- Diversifying to achieve new growth
- Going from startup to scaling up
- The engine behind business growth Diversification
Specialising and diversifying dont always have to be such a roll of the dice. All major business decisions involve uncertainty but there is a wealth of advice about how to approach this situation so future success can be pursued. Considering the following could help to lead you in the right direction:
(1) Choosing the right path for your business
When making a decision like this, it’s important to understand your competitors and their products. Evaluating your current business offering will allow you to identify whether you can diversify within your offering or whether you need to expand into new areas. Creating a broader range of products will help you reach new customers but to ensure this is successful you need to make sure you have a strategy in place. Exploring new offerings requires time and money so having a plan set up to ensure your core business continues to grow is important. Branching out will also require new skills so having the right team in place with specialist expertise will help you retain success.
(2) Understanding your customers needs
Market and consumer research is key to understanding where your business will succeed. Choosing to specialise gives your business the opportunity to position itself as the “go-to” provider for your service. Offering specialist knowledge allows you to build a loyal customer base and while theres still room to grow in your sector the worlds your oyster. Keeping up to date with the latest trends in your sector is key if you specialise enabling you to give valuable insight to your customers. Looking ahead, auditing your success to date will help you see if it can be sustained and whether there are points in the year for you to capitalise upon.
Diversifying or specialising within your business can help you achieve new growth and boost revenue. Having that direction will enable your entrepreneurial spirit to continue to flourish and with so many opportunities for growth out there it’s crucial to ensure you weigh up your options and spur your business to succeed.
Martin Hamilton is founder and managing director at Mash Direct.
Every business venture may start out with a sound idea and solid proposal, but that does not mean that they are safe from floundering and failing if growth is not achieved. After all, if you dont have plans for how your business will expand, how can you expect it to survive?