Four diversification strategies to rapidly grow your small business

Business growth depends on so many factors and diversification is one factor that features prominently. Diversification occurs when you venture into an entirely new industry or market with the aim of reducing risk, avoiding market fluctuations, and achieving an advanced growth rate. However, there are certain indicators that typically show if your business is ripe for diversification or not. If your aim is to have a few more income sources and grow your small business, here are four diversification strategies that you should consider.

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Provide Complementary Goods or Services

Complementary goods are goods that are often sold together. In other words, the demand for one complementary good leads to the demand of the other. Smartphones and selfie sticks, computers and antivirus software, printers and ink cartridges are some examples of complementary goods. Selling complementary goods or services helps you to tap into your competitors’ client base and thus consolidating yours. However, you need to step up your customer relationship to retain your existing and acquired customers.

Flow with the trend

As technology expands, more opportunities are being created to improve the ways business transactions are conducted. Today, e-commerce, online brokerage, and Bitcoin mining are among the top trends you can leverage for diversification. However, as much as you want to try out any of these models, you must learn how they work first. You shouldn’t be hasty in your approach; carry out a thorough market analysis before putting a foot forward.

Leverage Mergers and Acquisitions

This decade has witnessed some of the biggest and most interesting mergers the world has ever seen. Facebook’s acquisition of Oculus Rift and Microsoft’s acquisition of LinkedIn are among the major successful mergers we’ve seen so far. What a merger does is to expand an existing business. Furthermore, acquiring an existing business helps you to tap into another market, allowing you to leverage their target audience too. When mergers happen, the customers enjoy more value and this brings in more cash for the company.

Build more business fronts

Creating more income sources is not all the time done by breaking into new markets. Most times, it is done by expanding the existing business. Consider creating new departments or units within your organization, manufacturing new products, adding more services, and creating more branches. Another way to business a new business front is to change your means of interfacing with your clients. If you operate a brick-and-mortar business, consider taking your business online.

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