The author, in this concluding part of his Entrepreneurship Series, throws insights into how a business enterprise can be grown and thereafter diversified into newer correlating ventures for further growth.
As we wind-up this initial series on entrepreneurship, I assume you have benefitted from the same and have taken steps towards actuating entrepreneurship. We need you, as I had stated at the start of this series, and you should be getting started.
This brings me to our final agenda– growing your business. So, you have a product/service out in the market. What’s next?
Business growth, in its simplest form, is an increase in what you already do. If you're a writer who writes, you write more, in more places, for more readers. If you're a manufacturer who produces items, you amp up your manufacturing capabilities and produce 100 times as many items to sell in more markets and reaching more customers. If you’re a CA or a lawyer or a consultant, you hire juniors/assistants and take up more clients to service. Let’s be clear, business growth is not diversification. Diversifying is a different kind of business growth. To get more business growth through diversification, you don't do more of the same; you do something different.
A writer might branch out into advertising or even print media or venture into a medium showcase like podcasting. The manufacturer might acquire another company which builds a complementary part of his product or aligns with his product or even begin producing accessories for his primary product. The CA or the lawyer might start providing financial/legal planning and investment/risk seminars for individual clients or businesses as a whole, respectively or might even create instructional videos, certifications, training opportunities etc. Whatever your business or background, there are four smart steps to help you diversify.
- Find your limits
- Look at what you have to invest, both financially and in terms of resources available to you.
- What can you afford to invest in an acquisition or a new product line?
- Consider the initial funds needed to get the expansion up and running.
- Consider the ongoing funds needed to support the expansion, the new employees and so on.
- Consider the people power needed from you, your employees and your contractors.
- Consider all the resources you use to maintain and build your current business.
- Look at how much of each you can put into this new growth.
- What are the limits you're facing?
- What are the limits you need to self-impose?
- Find your possibilities
- Finding possibilities isn't usually the problem; finding the right possibility is.
- Start where you already are and think both vertically and horizontally.
- Vertically:
- How can you go deeper into what you're already doing?
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- If you own a particular niche, how can you drill down and provide even more to your customers?
- Or how can you step up to the next level of product or service offering?
- What is the next "step up" in your industry?
- Can you get there with your business?
- Horizontally:
- What are your competitors offering that you are not offering?
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- What are the related businesses in your industry?
- What niche is directly connected to yours?
- What product or service offers a complementary fit?
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- Figure out what fits
- The above two steps should leave you with a list of options.
- This should meet two basic requirements:
- They fit within your defined limits, and
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- They are related to what you currently do.
- If you've already established yourself as an industry leader, gained expertise, made significant connections, negotiated discounts, established vendor relationships and so on, you want to use those advantages.
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- Don't start from scratch
- Diversification means to grow in a new direction.
- It does NOT mean fragmentation.
- As a final test, compare each option with the company documents you've produced.
- Which ones fit best with your USP, your mission statement, your company vision and your business values?
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- You might not find a perfect fit. That's okay. You should, however, insist on correlation—a pretty high degree of it.
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- Balance growth with maintenance
- New things are both thrilling and demanding.
- New growth, new directions, new experiences get the entrepreneur's heart pumping. Enjoy that, but don't lose sight of the maintenance and ongoing attention that your current business needs.
- Getting the Right People
- A good business doesn't run on autopilot.
- Get good people in place to help manage both your new growth and your foundational work, so you can oversee both.
- If you can't trust yourself to automatically remember all the duties and checks you should be performing (and you really can't), then set up systems.
- Automate these systems as far as possible. And then run system checks.