The manufacturing industry can be unpredictable. One minute you might be entering into a lucrative contract with a great new customer; the next, that customer could be going out of business – putting your own company at risk in the process.
The best way to guard against this risk is to diversify your business and expand into new markets. Here are three reasons why you should consider it in your shop:
Building A Safety Net For The Unexpected Industry Downturns
Putting all of your eggs in one basket – whether that basket be a single customer or a single sector – can put your company in a perilous position. If the company crumbles or the sector weakens, you don’t want to be left scrambling for new revenue streams.
Spreading your customer base across different industries can help you survive these unexpected shifts. And though the fallout of losing a big customer – or multiple customers – can still hurt, diversifying will ensure that your business is more resilient.
Gaining A Competitive Advantage
Diversifying isn’t just a great defensive move for your business; it can also help you grow. Developing new products and new connections across industries (and even geographies) will unlock new revenue streams for your business.
Also, being the first to enter a new market or a new location will enable you to build valuable relationships, which you can leverage down the road keeping your competition from doing the same.
Identify sectors and locations that are currently under served by you and your competitors, and try to connect with prospects in those areas. Being the first to enter a new market allows you to showcase your expertise and gain valuable experience. You’ll not only gain new customers, but you’ll keep your competition from doing the same.
Avoiding Falling Into A Dependency Trap
Focusing too heavily on one customer or one industry can put your business in a restrictive box that you may not be able to escape.
For example, needs might shift the foundation of your business. You might tailor your processes and products for one company or industry, but those processes won’t transfer to other potential customers. Before you know it, your services are so niche that it’s nearly impossible to grow. This puts your business in the unenviable position of trying to attract customers and industries you aren’t equipped to handle. By diversifying your business, you will have more control over your company’s success.
The beginning stages of market expansion and diversification may be tough. However, it will be worth it if you keep these three factors in mind throughout the process. And with a resource like Thomasnet.com, you can connect with buyers from a variety of industries and geographies to help expand your new markets. See how Thomasnet.com can help diversify your business today.