Sunday, October 7, 2012

Want to make money?? DIVERSIFY!!

I was reading the Urban Dictionary the other day, and looked up the definition of Insanity.  According to that dictionary, it stated that Insanity is doing the same thing over and over and expecting a different result.  The Urban Dictionary gave this example:  Working a job and expecting to get rich is insanity. Now doesn't that tell most of the populous a truth?

If you're in business and have been running a company for a while, the economy has certainly not been very cooperative in providing decent revenues.  While you may be an expert in a certain field and in the past saw decent business profits, if you really want stability and want to jump start  2013 revenues then you have to diversify.  By this I mean, do something not related to your field but within one of your personal strengths to foster growth and sales.  

Get out of your element!  Especially if you've seen slow growth, delayed profits, or non payment by your customers!  If you're good at selling - get a completely different product to sell.  If you are a creative person, consider painting, web design, writing - anything that brings you into a different field than what you're currently doing. 

If you have a certain expertise and find a fellow entreprenuer that requires what you do (and vice versa) - consider forming a limited liability company to unite both services.  You do not have to share your personal companies to accomplish this.  You can each keep your personal and primary companies separate.  You don't even have to form an LLC, you can form a partnership by writing up an agreement between both parties.  It's that simple!

As a business consultant for over 15 years, I can tell you that the companies that are weathering this economic storm have diversified and therefore grown. For instance Nabisco, recognized maker of cookies in the United States.  Nabisco doesn't just make one type of cookie. It is the maker of Chips Ahoy, Fig Newtons, Mallomars, Oreos, Ritz Crackers, Teddy Grahams, Triscuit,  Wheat Thins, Social Tea, Nutter Butter,  Peak Freans, Chicken in a Biskit all used for the United States, United Kingdom, Mexico and Venezuela as well as other parts of South AmericaNabisco merged with Post Cereals because both companies had certain strengths they could provide each other to foster growth.

Another example, albeit when it started it was on a small business level, is City Fuel of New Hampshire's acquisition of Dave's Septic (also in New Hampshire). It doesn't take much imagination to understand that Dave's Septic is all about septic tank cleaning and portable toilets white City Fuel provided fuel via 10 trucks and 10 service vans to neighboring New Hampshire towns. 

Both businesses were completely different, but flourished because of their differences!

The businesses are managed by George Winslow.  In the Summer, Dave's Septic is extremely busy providing septic tank cleaning and portable toilets at weddings, construction sites, outdoor events, etc.  In the winter, City Fuel keeps employees busy providing fuel to homes and businesses to keep warmth on the premises.  

It's this type of merger/acquisition that benefits entreprenuers.  Even if you are successful, by diversifying in a completely different direction, you are ensuring that your business will continue to profit in good and bad economic times!