Purpose
To help you survive and thrive in business!
Introduction
I’ll keep this to the point – business in my experience can become over reliant in four main areas:
• Clients/Products
• Channels
• Suppliers
• People/Team/Staff
Yes of course there will be others and I always welcome feedback and builds upon the material I share. If you feel something important is missing that could help more business survive and thrive, please share in the comments or with me directly.
I this article l will draw your attention to each and review some of the steps you can take to de-risk and diversify your business.
Suppliers
How reliant is your business on one main supplier/ a few key suppliers?
Not sure what over reliant means for you, then ask yourself if that supplier did not exist tomorrow what impact would it have in your business? Where would you sit on a spectrum from could you easily find a replacement to there are no alternatives and that would ruin my business? If that’s a scary thought, then decide what action you are going to take now and write it down before you continue to read this article.
Multiple sources of supply are ideal to ensure continuity of supply. It can also help you stay ahead in price negotiations and quality control. Do you have multiple sources of supply for the vital things your business is reliant on? You’ve all seen the behaviours we resort to when at the last minute we find out there is a shortage of something – be it tomatoes, eggs or toilet paper, so it’s wise to plan ahead of the pack!
Contingency plans. Sometimes it’s not viable or possible to have multiple sources. In these circumstances l would advise having a contingency or alternative.
If you are a restaurant with fresh truffles from Alba on the menu, you’ll most likely need an alternative dish to serve when they are not in season.
Channels
How reliant is your business on one channel to generate leads/new sales?
At the same time consider how much control and influence you have over the channel(s)? Or are you at the mercy of someone else? I’ve heard horror stories from business owners who put all their marketing in to one social media platform wiped out overnight when said platform changes the rules/algorithm.
In Retail you might only be as good as your latest rate of sales figures and if you were better/worse than someone else competing for shelf space!
In social media – You are not in control of the algorithms – yes you can do all you can to stay up to speed, but that’s not total control. If you look the T&Cs of many social platforms, you don’t even own what you post!
On organic SEO you don’t control the algorithms! That said you can stay up to speed and continue to test, measure, and adapt as is necessary.
So, what might you do?
Two well-known / cliche phrases come to mind. ‘Don’t sweat the small stuff’ and ‘What get measured gets done’.
So, where do we focus then?
We recommend to our client to build 5-10 ways to drive new leads.
My top tip for those starting out is to pick 1-2 channels and get them set up and working successfully to start with. Then most importantly build upon that.
A mix of different channels/strategies will spread your risks. So again, you’ll need to consider your own appetite for levels for risk and reward as part of your business growth plan.
Different channel strategies will have different levels of risk linked to your circumstances. Let me explain by way of an example. Say one of your sources of business is referral, the more customers you have and can proactively ask for referrals the likely hood is this becomes less risky. Rather than consider this in the abstract you can start tracking your numbers. So, if you know you had 30 clients, you asked them or one referral each and the average conversion rate from asking to getting a customer was 30% – you’d expect an average 9 new clients from this channel/strategy. If you only had 10 clients and the conversion rate was the same this would only deliver you 3. Some of you are thinking l convert at greater than 30% for referrals – that’s great – identify the key drivers and continuously improve.
A professional firm might use the following channel mix to fuel their marketing funnel:
1. Website SEO – blogs & back links
2. Networking & follow-up
3. Linked In direct outreach.
4. Linked In content sharing eg Newsletters & posts
5. Organic social
6. Google PPC (pay per click)
7. Referral
The different channels/strategies will have different speeds of success – by which l mean the time between doing the activity and realising the cash sale. Remember that often multiple touch points/activities are necessary to build some sales. If we consider the above PPC (pay per click) would be one of the fastest and its targeting people who are actively seeking what you are offering now. Website SEO would be considered by comparison a slow build strategy, that requires ongoing consistent effort to over time generate results.
Think about which are faster/slower for you (or ask) to help determine your optimal mix.
When times are good don’t stop your marketing just adjust the emphasis – if we continue with the example above – stop spending on PPC for immediate returns and invest time in building SEO rankings.
There is no one magic formula for all business the key is to test, measure and adapt.
Clients/Products
I’ve grouped these together as your emphasis is likely to differ depending on if you are selling a product or a service. That said the what and the who are two separate areas, so best viewed as a matrix, which contains the key products or services and the different targets. I’ve drawn up a simple example below:
Product or Service: Target: | Business community | On-line learning & training | Team development workshops | Business Coaching | New Product/ Service |
| Business Start Ups | Yes | Yes | |||
| Micro Business Owners | Yes | Yes | |||
| Business Owners with Teams 5+ | Yes | Yes | Yes | ||
| New customer target |
In this example you can see how this business portfolio is made up of 4 products and 3 primary targets. You might plot this out for your own business and include the amount of revenue and profit you make from each, to show you it’s true importance. You can then evaluate the risks of losing and the value to be retained from protecting.
You can also go onto look at the opportunities of
– Offering existing products to existing targets (the orange boxes in the example above)
– Developing new products and or new targets (as shown in yellow)
Things you can do:
• Evaluate your own client product matrix risk levels.
• Evaluate whom else your proposition could work for. This could be new geographies.
• Develop new products or services to open-up new revenue streams.
Join the NoLimits Business Community
Are you a business owner looking to take your business to the next level? Join our innovative community of like-minded professionals and gain access to a wealth of valuable resources, including a community portal to chat with other business owners, ebooks, business development software, and growth events that will transform the way you do business. Best of all, these resources are completely free and will be available to you forever.
But the benefits of joining our NoLimits business community don’t stop there. By becoming part of our community, you’ll have the opportunity to connect with other business owners, share insights and ideas, and build valuable relationships that will help your business thrive. Don’t miss out on this amazing opportunity to supercharge your business and join us today!
People/Team/Staff
How reliant is your business on any one individual – it could be you!
If your business is over reliant on you, it’s possible you’ve fallen into what we refer to as ‘The owners trap” Signs you’ve fallen into the trap are:
– business slows when you take a holiday
– customers come to you with problems
– your growth has reached a plateau
Not only are businesses stuck in the owner’s trap stressful to run, they’re also worthless because nobody is going to buy a company dependent on its owner!
So ask yourself – What have done in the last year to make your business less dependent on you personally? / or plan to take action on now.
I love it when busy business owners realize for the first time that their business is worth more without them in it. It’s such a huge win:win
Is it one member of the team? Ask yourself if each team member were to leave what the business impact would be? How quickly could you replace and resume normal trading?
Conclusion
In today’s uncertain economic climate, diversifying revenue streams is a prudent strategy for businesses and individuals alike. Dependence on a single source of income is risky, as economic conditions can change, and disruptions can occur that impact revenue generation. I encourage you to evaluate first and then diversify revenue streams as necessary to reduce your dependence on any one source.
To determine where to start in your business, score yourself out of 10 on the following: [10 being really diversified and 1 being totally reliant on one source]
• Clients/Products
• Channels
• Suppliers
• People/Team/Staff
By James Gentle
Join the NoLimits Business Community
Are you a business owner looking to take your business to the next level? Join our innovative community of like-minded professionals and gain access to a wealth of valuable resources, including a community portal to chat with other business owners, ebooks, business development software, and growth events that will transform the way you do business. Best of all, these resources are completely free and will be available to you forever.
But the benefits of joining our NoLimits business community don’t stop there. By becoming part of our community, you’ll have the opportunity to connect with other business owners, share insights and ideas, and build valuable relationships that will help your business thrive. Don’t miss out on this amazing opportunity to supercharge your business and join us today!