How often have you been tempted in business to change its focus, try diversifying with extra products (that are not related to your core products), add additional services or maybe open another site in a different city, all because times are a little hard at the moment?
How many of you have not just been tempted but actually took action, to find out it wasn’t the cure you were looking for?
Due to the far reaching affects of the earthquakes in the South Island of New Zealand, there have been a lot of companies that have gone down this road, just to find that they got it wrong and in some cases have made the position of their business much worse – why does this happen and what should we be doing when times are harder for our business?
Never forget what has made your business successful, stay focussed on that product or service(s), especially if that is what your business has a reputation for providing to it’s market. Start thinking about how you can continue to educate your market, maybe even look at alternative ways of accessing your market, is there a way you can get in before your competition can? It is too easy to think “…maybe I should add another type of product” or “… maybe I should extend that service to include ……” If you find yourself thinking this may I take this opportunity to ask you, how long was it before your current products or services was recognised and valued by your target market? I’ll take a punt and say that it took months or years rather than days or weeks and if this is the case, what makes you think your latest idea will take off any quicker?
Plan Your Way Back To Success
If your business is slowing down, rather than panic, take a more structured approach to the problem, create a plan that will help the business get through this rough patch, think about the following:
- Why are the sales dropping, go back to the market and find out from your clients, both old and new, and find out what pressures they are facing that is causing them to spend less with you.
- Having identified the problems your clients are having, can you tailor your products or services to help them overcome some of these pressures?
- Look for alternative ways of getting your business’s message and its product or service to your target market, let me give you an example. A cafe that specialised in “food to go” products (a bit like packed lunches) decided to capture more of the market by giving their clients the option to order their packed lunches at the same time they would order their breakfast whilst staying at a motel (typically the previous evening) effectively cutting out any competition for lunch the next day.
- Get some third party, objective advice about how best to go forward, often there is an obvious solution to help your business, you may not be able to see it because you are too close to the business. An experienced business coach or mentor can be invaluable in a process like this.
Do Your Research
I’m not advocating not to diversify, if you are, you need to research the market thoroughly. If the feedback from your customer research (above) suggests you could provide an alternative product or solution, will they purchase it, if they will, how much will they be prepared to pay for it and if other businesses already cater to this market, why would they use you over others?
If the feedback is all positive, then you have just identified something your business could successfully diversify to. If the feedback is not positive then go back to the plan and stick to what you know.