Diversification as a route to business growth

In returning to work this year, I was quick to learn that PE lessons at home are a whole new ballgame. Last week, my client politely popped me on hold during our Zoom session. On her return to her dining room table, she explained that the reason she had put our call on hold was due to falling ceiling dust and swinging lights causing her some concern. Rushing off, she ran upstairs to find her son taking part in a Google Classroom PE lesson involving star jumps! 

This Zoom session led me to reflect on how our homes are being remodelled and how remodelling and diversification can support business growth at times like this. This year many of us have remodelled the ways we work, the way we live and perhaps even in our values! Yes, personally I’ve loved, lost and laughed in 2020, and many of us have experienced different ways of living and working too. We can’t always predict falling dust or hazardous swinging lights but we can minimise the risk. Dust does us no harm but a falling light will.  We face change and in return remodel our lives and our businesses but what can we learn from past diversification models.

The importance of advice and support

Firstly, I know businesses that seek external advice are more likely to improve their overall performance whilst embracing change and we know external advice comes in all shapes and sizes. As companies share the struggle the business owners and managers can feel isolated and overwhelmed. For some, even compiling a ‘to do’ list seems a waste of time as so much feels out of their own control. Recently a client attended one of our workshops. The session was great and there was the additional help from peers who were also experiencing similar external challenges and opportunities. A peer group enables you to make connections that go far beyond networking.

There have been quick responses by the business community to adapt despite the COVID response failing to give us much time for thinking and planning. I have heard that there hasn’t been much time for leaders to think, most feeling their thinking this year has been clouded by worries and the unknown. Some saying, “It’s all we can do. To perform a ‘knee jerk reaction’ and fingers crossed those changes, new services or products work.”  

I’ve been supporting companies and individuals through different stages of their business for over 25 years, in the public, private and charitable sectors and I’ve always been able to find an example of successful diversification equating to a good return on investment!

Diversifying is the new normal

Many successful companies use diversification as a growth strategy but it is often disparaged. I don’t think we should play this down without trying.

Successful diversifiers have certain features, which business owners can learn from. 

• They select capable managers;
• Secure competitive advantage;
• Establish a supportive network/peer group or stakeholder group;
• Install appropriate performance measures;
• Set effective incentives for staff;
• Align the corporate culture to strategic direction;

Business can benefit greatly by emulating the practices of successful diversifiers and boost their own performance.

Diversification can also initially follow the key points to start a business:

1. What’s your idea? Have you seen a gap in the market? Is that gap a niche?  Is it a passion or skill you have? Can you do it better than others?
2. Who can help – Staff, Peers and Experts? Focus on what you do best and if needed outsource the rest.
3. Who are the customers? How will you fulfil their needs/demands?
4. Promote and get your company known. Telling a story or history of you or the company starts to build the relationship. Raise the chatter!
5. Sell – products, services, even your values and culture.
6. IP – protection for patents, trademarks, design and copyright.
7. Can you offer a b2b service to a b2c market or vice versa?

How to diversify well

Having worked with the farming sector in the 1990’s, as the UK was afflicted with an outbreak of BSE, also known as ‘mad cow disease’, I found myself advising on full business service change. Farm owners were forced to diversify and diversification became a hot topic. In the following 10 years, a DEFRA survey showed two-thirds of farm businesses had diversified and the sector still has a need and want for diversification.  

Farms can now be seen to offer ‘experience days. Experience days are offered by many companies but perhaps farm owners can do it better! With a growing population of thrill seekers and those wanting to ‘out-do’ their peers there is an increasing opportunity for businesses to consider how they could take advantage of this expanding audience.

Services were aimed at higher levels of consumer expenditure. I know we are a nation of pet lovers, but over the last year this must have increased hugely and those of us with pets do like to splash out on our furry companions. This saw farms opening up with pet grooming facilities, dog agility and training.

It was also about making use of technology which could help reach a significantly wider audience than traditional business models would allow. Aside from the business changes, it was taking time to understand different rules and regulations that could apply to new services and products.

Is it for me?

With some business owners experiencing pressure to find the next best business idea, could diversification be the right route for you?

We are here to help with your research and we can help assess if the new model stacks-up financially?

Diversification isn’t new, but the way in which the University of Chester can partner your business to support growth is new. We offer business support from the commercial team through a bespoke HE partnership and knowledge exchange with our amazing students, direct partnership with our business school or medical school, plus an open network of knowledge from our professors and researchers.

If your business wants to diversify, then let the first step be starting a new partnership with the University of Chester. It’s like the old adage, when life gives you lemons, make lemonade but this time, I give you the University of Chester, let’s make changes and grow your business.

Heather Carroll
Business Development Manager