It’s an old saying, but couldn’t be more true today – Don’t Put All Your Eggs in One Basket
While the quote suggests putting your eggs into multiple baskets, another idea is to have more than just eggs in your basket. In other words, diversify your business.
To generate the most profit in your business, you must build your business on a foundation of Multiple Profit Sources instead of depending on one single revenue source.
Why grow incrementally or linear, if you can grow geometrically and exponentially with the same time, effort and capital. Let geometry work for you. Geometry is not 2 + 2. It’s 2 x 2 x 2. It’s basically bringing
three different factors, or more, together.
It’s been proven that it is easier to sell more to each customer than it is to get in more customers. One stop shopping has become the standard. While the term – upselling- may be distasteful for your industry, it’s a fact of sales. Get the buyer in and offer them many, many products.
Let’s say you own a yoga studio that does very well with group classes. Have you specialized into different demographics for those classes? Pregnant yoga, couples yoga, senior yoga. Do you sell yoga-related products like mats, videos and soothing music? How about gift certificates or promotions with local spas?
If you have a foundation of multiple profit sources, then your business can continue to prosper through difficult times. If sales go down in one area, they will go up in another.
Sometimes an expansion of products is obvious, sometimes it’s not. Disney started out with cartoon movies, built theme parks and now has cruise ships. The overall brand of family entertainment is present, but the diversity of their distribution channels is vast – from movies to travel to clothing and even a basketball team.
Disney is an example of their egg being in different baskets. Mickey is everywhere and making money everyday. Walt Disney was brilliant to diversify into the theme parks, when DisneyLand was built in the 1940s it was revolutionary.
If you think your business is limited, I suggest going online to research ideas from your competitors. One great thing about the internet is that you can overcome geographical barriers. You can spy on companies on the other coast and use their ideas in your community. Study the big businesses in your industry and incorporate some of their practices into your business.
Think Big! Be creative and find a new idea for an expansion of your current offerings. The profit will increase as you add more options for your customers. Let me know if I can help you brainstorm! Kay Peck
01 December 2009, 12:53 pm
You are absolutely right about diversifying. Two years ago my business only sold power boats. I was smart enough to add in other types of boats, from kyacks to sailboats and even jet skis. I know that if I hadn’t made the change, I’d be out of business because the more expensive boats aren’t selling.