Diversification is a buzzword that’s often thrown around as the secret sauce to success in your business. Still, truth be told, many of us may not have a deep understanding of what diversification actually entails and why it even matters. If you fall into that group of “interested but not sure,” don’t worry, you’re not alone. And, even more great news, Spring-Green, leader in the lawn care industry in your neighborhood and nationwide, has a quick and easy primer for you to check out to get you up to speed on how diversification impacts your business (in a positive way, of course). So let’s unpack what it means to diversify your business and get maximum returns on your investment in your business.
Frequently Asked Questions About Diversification
- What Does Diversification Mean? Diversification can be defined as when a company begins to produce a product or offer a service that is uniquely different from its current offering, typically with the goal to facilitate growth or overcome a shortage.
- Why is Diversification Important? One might think of diversification like a Plan B. Diversification helps fill in the gaps when the core business lags. For example, in a seasonal industry such as lawn care, service revenue can dip during colder months. This is a natural cyclical nature of the business that can be filled in with a diversification plan. Diversification also helps account for unplanned changes in market activity, whether due to economic downturn, increased competition, or other unplanned fluctuations. Diversifying your business by becoming a Spring-Green partner works in conjunction with your existing business and is an attractive growth strategy to capture new sales, broaden your services for clients, and become more economically resilient.
- What Can Diversification Provide My Business? Diversification can offer your business a financial safety net for those periods when the core revenue source is not performing at optimal levels or flowing the natural down periods that are expected. This is the main benefit, but the benefits of diversification don’t end there. Diversification can also provide far-reaching benefits such as…
- Growth Opportunities – Not just a band-aid to over down periods, diversification can help with growth objectives through the addition of new products and services.
- Brand Cache – Your diversification strategy can have the added benefit of increasing your brand’s strength and your marketing reach. As more consumers or clients begin to learn about your business, they begin to recognize, trust, and buy into your overall brand proposition.
- Employee Satisfaction – As you diversify your business, your employees get challenged to learn new areas of the business, grow their careers, and increase engagement and morale. This positive culture can impact your future success and create a team that supports your bottom line for years to follow. Mike Valestin, owner of Spring-Green Lawn Care and Valestin Landscape Design Company chose Spring-Green for the diversification opportunities it provided, saying, “we’ve done fertilizing, maintenance, and services like that, and I wanted to grow that side of the business. That’s when I started looking into a Spring-Green franchise.”
- How Can I Diversify My Business? While the case for diversifying your business might seem intuitively obvious, the roadmap to doing it successfully is not so crystal clear. It’s important that your diversification plan be well thought out, comprehensively researched, and measurable with key milestones along the way. Here are a few best practices to keep in mind as you consider a diversification strategy for your business:
- Timing – If your business is seasonal, etch out time during the peak season to determine how to implement your business’s diversification plan. Get the balls rolling in advance to allow for seamless movement into your new area of the business.
- SWOT – Take some time during the planning phase to assess your strengths, weaknesses, opportunities and threats. Going too far out of your business’s current scope or taking on a product line or service that faces immense competition could cause you to lose focus on your core business, diluting your objectives.
- ABM – In sales, the mantra is “always be closing.” In the case for diversification, adopt the mantra, “always be measuring.” Implement systems to keep a close eye on how things are going on a regular basis to help eliminate surprises and optimize your diversification efforts. Spring-Green’s ongoing support structure and over 43 years of experience sustains healthy profit margins and helps franchise owners plan and manage their business goals.
We’ve all heard the adage about putting all your eggs in one basket, and diversification is important for that exact reason. It’s especially imperative in industries that are cyclical or seasonal in nature and those who face regulatory fluctuations. Diversifying your business can help you reduce risk and expedite growth with the added benefits of improving your brand’s reach and creating a team of challenged and engaged employees. Sounds like a true win-win!
Spring-Green, America’s neighborhood lawn care team, helps its franchise owners create successful, diversified businesses through extensive marketing tools, personalized support and a tried and true business methodology.