Diversification may serve you well as you look for ways to make your business thrive, as there are many ways to dive into it. Putting all your resources into one business can be limiting or even dangerous. Whether and how to diversify a business starts with planning agenda.
Success through diversification is not easy, as many companies have already tried and failed. While sticking to your tried-and-tested approach can be more attractive, diversification can lead to business growth and the development of profitable new revenue streams.
Here are a few options for businesses wanting to break fresh ground.
Singaporean’s preference for online shopping shows no sign of slowing. A study by Visa showed that 26% of Singaporeans shop online at least once a week – the highest percentage per capita in Southeast Asia. Those in the 25 to 44 age group most frequently shop online in Singapore. If your company doesn’t already sell things online, having a corporate account and getting financing to add this capability will lead to new markets locally and abroad.
Businesses that don’t diversify into digital may miss out on this significant slice of revenue.
Third-party marketplaces are an alternative means for local retailers to create a shopfront to the world and create money online. The largest is Amazon, a selling platform that charges retailers monthly to list their offers. In Singapore, other options include Carousell, Lazada, Shopee, Quoo10, eBay, Zalora, and others.
If you don’t have the resources to build and manage your website, getting financing through your corporate account can greatly amplify your reach.
Target a new niche
The best way for some businesses to find better possibilities is not to broaden their focus but to narrow it. This is possible through product or service development that appeals to a specific group of customers.
This approach will land you in a good place as some of the world’s most successful businesses don’t try to be all things at once – they locate a narrow segment to make their mark. For example, a certain German car manufacturer didn’t follow the lure of the mass market and kept its focus on luxury performance vehicles.
Knowing the industry, you operate in and keeping your niche customers in mind will help you find opportunities to focus on, add value and create your profitable niche.
If your business is well established here in Singapore, a global expansion strategy is a great way to diversify, grow and safeguard against market fluctuations, provided you plan and reduce the risk of global expansion.
Ample research is the key to understanding which territories to target and locate the most effective overseas distribution channels.
Acquire a competitor
Purchasing an existing business whose offers complement yours can lead to growth and lets you diversify quicker than organically possible. Understand how the company you’re acquiring will add value to your offering to succeed in this endeavor. Companies that diversify successfully through acquisition target enterprises whose core business is similar to their own with a good prospect of generating revenue within an acceptable period.
Finding ways to acquire more value from your current facilities or range can be a low-risk and low-cost way to diversify your business. Don’t forget to take advantage of taking out a loan from your corporate account after ample research to give you that capital injection and proceed with your plans.