The massive disruption called 2020 threw so many businesses of all sizes into disarray. Some were forced to shut up shop temporarily. Others battled on with a reduced offering. Yet more came to the conclusion that they needed to adapt. One year on, many businesses have embraced that need to adapt and diversified into new products or ways of operating.
Whether you’re a freelancer, have a small business, or run an agency, how do you decide if diversifying is the right way to go?
What percentage of your workload will it add or replace?
One of the reasons I put on weight during the 2020 and 2021 lockdowns is the number of my local restaurants that diversified into offering takeaways. They either couldn’t open their doors to sit-in customers, or they were forced to reduce the number of tables. They needed to make up lost earnings and maintain their workforce, so they updated their websites and publicised their new take-out service.
Depending on the rules of the then lockdown – restaurants having to close or limit sit-in numbers – earnings from takeaways may have completely replaced sit-in diner earnings or more likely replaced a sizeable proportion of that income. Now that lockdown rules have been eased and restaurant numbers are getting back to normal, every one of my local restaurants has continued to offer takeaways. They have added to their workload, which in turn means extra expense and extra staff in addition to the extra income.
If you diversify into a new service or product:
- Will that replace any part of your existing workload and what proportion will that be?
- Will it add to your workload?
- Will it fill a gap in your workload?
Will it create a regular workload or an occasional one?
Or to put it another way, is this something you intend to offer as part of your ongoing business or is it a temporary arrangement?
For instance, you offer copywriting and research services. It’s what you love and also what you are brilliant at. An ongoing client wants to know if you could not only write his social media posts but also schedule them to his social media accounts and respond to comments and enquiries.
It’s not beyond you. You could charge the same rate as your current services and keep yourself in this client’s good books. You begin to wonder if you could offer this service to other clients.
Before you decide to diversify, consider:
- Do you have the time and resources to offer this new product or service as an ongoing service?
- Will you promote it as one of your main products/services or place more emphasis on other parts of your business?
- If a client ask – like in the example above – led to this new service or product, do you want to keep it on a personalised, individual basis only, rather than offering it to everyone?
- If you decide to offer it to everyone, is there a market for it?
How does it affect your brand?
Your business brand isn’t just about the products you offer and the logo on your website. It goes much deeper than that. Your brand represents your customers’ expectations of you and their trust in how you will deal with them.
If you add a new offering, how does that affect your brand? Does it add to the picture your clients have of your business or detract from it? Does it in fact dilute the value you can provide and the customer problems you solve?
- Does my new offering fit in with my current brand?
- If not, which needs to change? The way my brand is represented or the new product/service?
- Does this new product or service make my brand’s offerings too scattered?
Do you want to do it?
So far, you’ve considered what percentage of your workload your new offering will add or replace, whether this will be a regular arrangement or not, and how it may affect your brand. That’s all very business-y and sensible, but do you actually want to add this new product or service?
‘Want’ may not seem a very business-like factor to discuss but if you don’t have an enthusiasm for adding a string to your business bow, then there’s a good likelihood that it’ll fail. Or worse, it will make you stressed, bored, and unhappy.
For instance, last year I decided to add a complete social media service to my offerings. I would write social media posts, schedule them to customer social media accounts, and advise on social media plans too – marvellous. I found customers for my new service but offering a complete social media package took me away from the work I really enjoy – writing blog posts and articles. I felt scattered and even a little resentful of the time spent posting to customer social media accounts. So earlier this year, I dropped that service to concentrate completely on the work I’m best at and that ultimately gives me satisfaction.
Even if your enthusiasm comes from the amount of money that your new offering will bring in, there has to be an element of ‘want’ and ‘like’.
So, final question, do you want to diversify? Well, do you?