Before the recession hit I didn’t diversify. I had a store with a limited on line presence and that was pretty much it. I relied on foot traffic, word of mouth and press end of. Then the recession hit and suddenly out of nowhere my revenue stream got squeezed big time and I was left wondering how I could keep this business going, when I didn’t even get enough in to pay the rent. I could have gone two ways given up (not an option) or think, think and think again of a way out.
Then it hit me.
The most important thing you can EVER do for your business is make diversification a long-term strategy. I say this from experience and I so endorse you guys to do the same. Bust out and try something new, extend your range of services, or product line for this very simple reason it will not only increase revenue from existing customers it will expand you into new markets and a whole new customer base. Even if you are doing incredibly well now you never know what is around the corner and after the terribleness we went through I vowed never again to be in the same situation, and only relying on just one thing. Ever! In our worst times we couldn’t even afford enough products to fill the whole store, closing down a section would look terrible so I diversified and opened a design studio at the back. That brought in a whole new set of customers and kept us a float. It also meant that the front of the store had more products in than normal and what little was left in the back got shoved to the front. This taught me two things. More people would come into the store when it felt full as opposed to gallery-esq and diversifying in this small little way saved my business.
Diversification is now part of our long term business strategy. I now hold design schools regularly in London (and further afield when my schedule allows). I write books, I design products my own label collection of products which is now winging its way to the coolest retailers around the globe to my licensing portfolio whereby I design products for other companies like Debenhams or Sofa. Com. I interior design, not so much these days because of my schedule but there are many strings to our bow. All of which is growing my business faster then just simply having that one store. See why it’s so important!
Diversification boosts sales no doubt about that. What I figured out quite early on during those tough trading times is that diversification for me didn’t mean starting something new like lets say opening a string of coffee shops it meant building upon my brand with products and services that tied into it. The other plus about diversifying is that you’ve already got accountants, and warehousing and PR teams or staff in place so its not like you’re starting from scratch. That said diversifying will distract you from your main business which is theoretically stable so be sensitive to that and don’t take your eye off that ball. I did it once when I had a crazy filming schedule and hardly had any time to go into the store, I think for 2 months on incredibly long days I simply didn’t go in. Never again.
It needs constant attention, all the time a bit like the two M’s. Leave them for too long and who knows what trouble they are causing! So I say again if you expand into a related market rather than a completely new one there will be way less risks. Plus all the things we have diversified in have helped my core brand (my retail store) big time. Books are sold all over the world getting the brand name out there, products also etc etc. Each stream promotes the other.
Diversification is the key to success in tough economic times and in good ones and if you start thinking about it now and plan it into your strategy in a few years time you’ll be sipping espresso martinis on that yacht in the Med.
See you over there!