Diversifying further into your marketplace can be scary for small business owners. Why? Because it basically represents the unknown which seems counterintuitive to solidity and stability. You might be thinking, “I’m great at what I do, so why take the risk of creating something new?”
Quite simple, really. Here’s why: diversifying with extension products open up exciting pathways for your business’s future. Not only does it allow you to get more from what you already have, it can also work a lot like a backup plan – in that you have some sort of a parachute, the strings of which you can pull the moment interests shift away from your main product or for when it becomes less relevant. When you diversify to get more from what you’ve already got, you’re giving your business longevity and flexibility. Sure, it may be scary, but then again, it’s crucial to the growth of your company.
So how do you branch out? Here are 3 steps to help do just that.
Build on what’s working
People often mix up extension products with diversification. It’s not exactly the same thing – precisely because you’re not creating a bunch of new unrelated products and aiming for a new audience. You’re building upon what’s already working and an existing clientele, it’s best to think of this as simply expanding or branching out on what you’re already doing.
Add offerings that either complement or further advance your main product or service. For instance, with the concept of efficiency in mind, if you produce fancy slim wallets that can hold phones and few cards, think what would compliment that product and appeal to your existing customers. What about creating a little keyholder that goes with that wallet? Would your customers like that extension product? Yes! Would it be easy to sell to them? Yes! So, cook up ideas that have direct link to your core products and services – and when you do, make sure everything fits and works together.
Find the right product formula then expand it.
Set things straight
It all starts with a simple question: why? Define your reasons for extending and keep them in line with the overall vision for your business and your existing target market. Do you want your customers to spend more money? Is this about bringing in a new idea of yours into the marketplace? Do you want to outshine the competition? Or are you just looking to improve an existing product? Whatever your reasons may be, the key here is to make sure you know what they are.
Stick with your current market
Then moving forward, ask: who? Decide who will be using your new extension product – will it be every single person in your current customer base? Just a subset? Or will it be an entirely new demographic? Remember, with creating “extension” products – the idea is not about trying to start up a whole new business and go after another marketplace. It’s about aiming for the people whose attention you already have: your existing clientele!
While running a business is all sorts of exciting, creating extension products one is even more thrilling! Why? Because it’s easy to do and can create some “easy wins” for your business! But just a reminder: don’t get too caught up in this excitement then make the bad decision of branching out even before your business is ready. Take your time. Ask the right questions and work with what you have. And once you’ve got all these down, plug them into your business and watch it grow!
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