Did you know that a business is more likely to fail if it relies on just one source of income? This is why it’s important for small businesses to diversify their operations. Here are some tips on how to do just this. By following these tips, you can help protect your business from potential financial disaster.

There are 32 million small businesses in the United States. Small businesses do a great deal for the economy, and give many people the freedom to run their own company on their own terms. Consumers love supporting small businesses too. But despite this, the five year survival rate of small businesses is less than 50%.

One way to ensure the longevity of a business is to diversify. This means offering multiple revenue streams, services and products that are not tied to one single source of income. When a business has multiple sources of income, they can better weather any potential storm.

So what kind of things can you do to diversify your small businesses?

Expand Product Offering

Diversifying your small business can start by expanding your product or service offering. Take a look at what you already offer and see if there are any new products or services you can introduce. You could also consider offering a custom version of your product to cater to a specific niche.

Starting to look at products or services that are in a similar niche to your current products or services is the first thing to look at. But think creatively too. For example, if you specialize in selling vacuum cleaners, why not think of all cleaning related products that you could sell. Or if you sell chocolate and candy, think about importing chocolate and candy from other countries, that you could market as a rare thing to find in the United States.

Look At Trends

As you start to think about how you could expand your product offering, look at current trends for some clues. Are there any popular products or services that you can capitalize on? Check out what’s trending and consider if there is anything you could offer related to those trends.

One current trend is cannabis and cannabis products, since it is gradually becoming legalized in a number of states. Everywhere from convenience stores to health food cafes could branch into this niche logically, and many other types of businesses could find a way of marketing it as part of their product range. Just look at what the rules and regulations are for selling cannabis in your state. For example, the DCC California is the Department of Cannabis Control, which regulates all cannabis businesses in this state.

Find New Markets

Another way to diversify your small business is to look for new markets. Do some research and see if there are any new niche markets that you can target. You could reach out to these customers and offer them something unique, either a product or service.

You might even want to commission some of your own market research to find out which other customer types you could be targeting with your products or services. This can be done through a market research agency, who will also look at things such as national and international competitors.

You could also look for online markets that are more popular in other countries than they are in the US, such as China or India. For example, if you’re selling a product that is popular overseas, why not capitalize on this?

Partner with Other Businesses

Another way to diversify your small business is by partnering with other businesses in your industry. This is a great way to access new markets and customers, as well as benefit from the expertise of other businesses.

You could partner with businesses that are in the same niche as you and open up retail outlets, offer discounts to customers who purchase products from both businesses, or even provide a discount if they buy products from both businesses. You could even offer a loyalty program where customers get discounts or points for buying from both businesses.

Finally, you could also partner with businesses that are outside of your niche, such as a local charity or non-profit. This is an excellent way for you to give back to the community and make an impact, while also helping to increase your customer base.

Develop New Skills

Finally, diversifying your small business can also mean developing new skills. You could look into taking courses in areas such as project management, customer service, or marketing. This will help you to better manage your business, as well as improve customer service and sales. Additionally, you can use these skills to develop new products or services that you can offer your customers. Getting into product development could be great for your own personal career progression too. Learning how to conceptualize something and bring it to life is an invaluable skill. It will help you to become entrepreneurial, as you’ll need to think of your new product from all angles, from the cost of manufacture, to finding the best way to market it. If you come up with something great, you may find yourself selling it on a B2B basis for other businesses to sell as part of their product ranges.

Diversifying your small business is a great way to increase revenue, reach new customers and markets, and develop new skills. There are a number of different ways to go about it, so take the time to explore all the options and pick the ones that make the most sense for your business. With some planning, research, and hard work you can diversify your small business successfully. Good luck!