![](https://ynygrowthhub.com/wp-content/uploads/2023/12/research_innovation-1.jpg)
Diversifying to secure your business
In a tough economic climate, businesses must adapt and evolve to ensure their survival. One approach to securing your business’ future is by introducing new services. Diversifying your services or products can not only help you weather challenging times, but also open up new opportunities for revenue while helping you retain existing customers. Here, we look at some of the benefits of diversification to provide you with some ideas for how you might start thinking about developing new services in your business.
–
![](https://staging.ynygrowthhub.com/wp-content/uploads/2023/10/dividers-07-1024x37.png)
–
What is diversification?
Diversification is a strategy that involves expanding the range of products or services your business offers, reducing your reliance on a single source of revenue. It can seem counter-intuitive – after all, you would be investing more money during a risky period – but this actually helps mitigate the risks associated with economic downturns or other challenges. Example of diversification include:
- Expanding your range of products or services: This involves adding complementary products or services to your existing offer. For example, a coffee shop might introduce a line of cakes, or offer external catering services to diversify its income streams.
- Entering new markets: Expanding geographically can help your business tap into new customer bases. This might be achieved through opening new physical locations or by moving into selling your products or services online.
- Vertical integration: A different approach to expanding your range of services – it gives you more control over your supply chain by expanding into related industries. An example is a car manufacturer producing its own parts or launching a car-sharing service.
What are the benefits?
- Mitigates against risk: By diversifying, you reduce your business’ vulnerability to economic downturns in a single industry or product category. This reduces your overall risk exposure.
- Increases income: Introducing new services can create additional income streams, increasing your profitability. These streams can prove especially valuable during economic downturns when demand for your core products or services may decrease.
- Supports customer loyalty and retention: Offering more services, from a trusted source, can boost customer loyalty. Satisfied customers or clients are more likely to stay with a business that meets multiple needs, and the chance of them recommending your business to others also increases.
- Future-proofing: Diversification can help your business stay ahead of the game. By introducing new services that competitors aren’t offering, or entering new markets where there is little competition in your area, you can carve out a niche for yourself.
What do I need to think about?
- Market research: Identify gaps in your market, understand customer needs, and assess the potential demand for new services. This data will help you make informed decisions.
- Make a plan: Develop a clear and comprehensive business plan that outlines your objectives, target market, budget, and timeline. Ensure that your new services align with your brand identity – they should feel ‘of a piece’ with your existing offer.
- Marketing and promotion: Create a marketing plan to introduce your new services to your existing and potential customers. This is also an opportunity to re-introduce your core services to potential customers and new audiences that may not be aware of them.
- Measure and evolve: Monitor the performance of your new services, gather feedback from customers, and be ready to make the necessary changes to improve them.
In difficult economic times, diversifying your business’s service offerings can provide stability and growth opportunities. But remember that diversification needs thorough research, planning, and effective marketing. With a well-executed diversification strategy, your business can not only survive challenging times, but also thrive and prosper.
Articles
Export Support Roadshows to drive business growth in North Yorkshire
Businesses in North Yorkshire are set to benefit from a series of Export Support Roadshows, designed to drive growth across the region.
York & North Yorkshire Growth Hub Rolls Out New Autumn 2024 Programme to Empower Local Businesses
The York & North Yorkshire Growth Hub has launched its Autumn 2024 Programme, offering a range of tailored support to businesses across the region. Unveiled at C4DI in Northallerton—a vibrant tech hub—this initiative provides crucial assistance in one-to-one specialist support, peer support, start-up guidance, digital transformation, skills development, and investment readiness.
Take the LEAD! Leadership Excellence and Development Programme Launched for York and North Yorkshire
The Leadership Excellence and Development (LEAD) Programme is tailored for small business owners who want to strengthen their leadership skills and drive business growth. Over six months, this programme covers key areas essential for your success, delivered by experts in their fields through a mix of workshops, coaching, and consultancy.
Events
10th September 202410:00 am - 1:00 pmFREE
Charity Leadership Group: Peer Support for Harrogate’s Third Sector
The charity sector faces numerous challenges, from operational hurdles to broader societal and economic issues. To address this, we are proud to be launching a Harrogate-based peer-to-peer programme for charities, social enterprises and other third sector organisations based in North Yorkshire.
11th September 20247:00 pm - 9:00 pmFREE
Strive Live Start-up Incubator
Looking for start up support in York & North Yorkshire? Join this award-winning programme designed to help entrepreneurs.
11th September 202410:00 am - 1:00 pmFREE
Scarborough Peer-to-Peer: Recruitment and Retention – How to get it right
Are you looking to improve your business's recruitment and retention? This Scarborough-based peer-to-peer programme will let you learn best practice from industry expert KD recruitment, benefit from practical exercises, and learn from the experience of other businesses.
Resources
Webinar Recording: Setting Your Social Media Objectives
As part of a six-part social media webinar series delivered by Caroline Wilson of Hot Toddi, this webinar looks at how setting objectives can support your business.
Webinar Recordings : Making the leap: are you ready to start a business?
If you think you're ready to start a business, check out this exciting webinar where we'll find out what it’s really like to take the leap. Hosted by the team who bring you the Strive Live Start-Up Incubator.
Webinar Recording: Apprenticeships Unmasked – Are they right for my business?
Are you a business owner, or part of a business team looking to boost your workforce? Apprenticeships might be the answer, but there are many myths and misconceptions out there. Our webinar, "Apprenticeships Unmasked - are they right for my business?" is designed to clear up the confusion and provide you with the facts.