Is it time to diversify your business? How can you do that? And what does “diversify” even mean? We’ve got all your questions answered below.

What is diversifying anyway?

As a startup, you likely have one product or service that you’re really good at. It’s why you got into the business and it’s the thing that’s allowed you to take off. But at some point, that one hit wonder just won’t do it for you anymore. If you want to continue to grow and attract new customers, you need to add new tools to your arsenal.

Diversifying is the process of adding products, services, locations, customers, and/or markets to your portfolio. It might mean rolling out a few new products that build on the success of your first, branching out into offering additional services, opening up new locations, or taking your operations online if you haven’t already, so you can reach more customers than before.

What are the benefits of diversifying?

We’re glad you asked. For one thing, diversifying allows you to take your business to the next stage of growth. You can only go so far selling one product in one location to one subgroup of customers.

For another, it makes your business more resilient. If you’re a one-product operation, there’s a good chance changes in economics or technology will render you obsolete at some point. Having more offerings and a larger customer base isn’t a guarantee you won’t go under in the case of, say, a sudden unexpected recession, but it does increase your chances of survival.

How can I diversify my business?

As you consider diversifying, asking the following questions may help pinpoint areas where you can grow as a company:

• Would changing how you provide your product or service add value for the customer?
• Instead of recreating the wheel or adding a whole new suite of services, can you simply evolve your current offerings?
• Is there a new customer segment that fits in well with those you’re already targeting?
• Could you partner with another business to make your services more comprehensive?

How do I succeed at diversifying?

Here are a few best practices to follow as you prepare to diversify:

• Make sure your new offerings actually create value for your customers
• Make sure you can actually provide the offerings you’re considering (and do so well)
• Build on the strengths you’ve already established
• Make sure your team members are all on the same page and ready for the transition

Diversifying will, of course, require a lot more research and thought, but these tips and questions should be enough to get you started. Never underestimate the power of diversifying to strengthen your brand and widen your reach. Ready, set, diversify!