Strategies to Diversify Into A More Stable Recurring Revenue Business
There are two ways, in general, to bring more revenue into your business: sell your products or services to more people; or get your current customers to buy different products or services from you.
If you look at an industry like office supplies, there are many products someone could purchase like paper, folders, pens, etc. But even some of the major companies have diversified into designing business cards, brochures and more, as well as shipping. They want to be seen as a one-stop shop for all your office needs, not just supplies. That’s where diversifying your business comes in.
Let’s look at these two ways to bring in more revenue:
1. Find more customers.
Let’s assume you have a great marketing plan in place to help increase sales and boost revenue, reaching as many potential customers as possible in your area. The next step would be to expand your territory.
If you’re a franchise owner and want to get into other territories, you need to find out what is available near you. Find an open territory and do your research. Does that area have a lot of customers who need or want your products or services? What is the competition like in that area? If, after you do your research, you feel you can be successful in that area, consider investing in that territory.
With the close proximity, you have the opportunity to increase the scale of your business, and subsequently your revenue, while limiting your workforce. You could also consider purchasing a competitive business in your area. Immediately you ‘inherit’ that customer base, giving you a larger market share. In the purchase, you may also receive additional equipment and a built-in employee base.
2. Add more products or services.
In your industry, what is a complementary business? Don Stone, a Pet Butler Franchise Owner in Dallas, Texas, already had a large mobile pet grooming business. He added a Pet Butler franchise in order to diversify and be able to cross-promote his services between these businesses.
Are there other products or services you can sell in your business? Determine what those are and add them as another benefit to your customers.
Why should you diversify? There are several reasons. We have identified three reasons below:
1. Improve sales. Is your business is growing, but you want to boost that growth? Or has sales growth stalled? By adding a new territory or new services to your business, you are adding new revenue streams.
2. Reduce risk. Is your business seasonal? Do you have only one type of customer? By adding new products or services or diversifying by adding a complementary business, you reduce the risk of losses during an off-season or a down-turn to the economy. An ‘off-season’ for one business may be the busy season for another.
3. Exit strategy. What will you do with your business when it’s time to retire? Savvy business owners think about this early on in their ownership so they have a plan in the event something untimely happens. The business may be sold to another company or employee. If it is a family-owned business, there may be a succession plan in place for a family member to take over. When you decide to sell, you want the value of the business to be high. By diversifying products, services and industries, you are adding value to your business through repeatable processes and sustainable income.
Bob and Janet Dailey, Pet Butler Franchise Owners in Phoenix, Arizona, run their franchise along with their daughters. Janet Dailey noted, “They will take a bigger role as the business grows.” Bob and Janet are doing this to have a lasting legacy that will live on through their daughters.
Why Diversify with Pet Butler?
According to Bob Dailey, “If you are already in the pet world, a Pet Butler franchise is a nice diversification strategy. It is a nice way to diversify and get more deeply rooted in the pet industry and with your customers.”
Coby Hough, Pet Butler Franchise Owner in Silver Springs, Maryland noted that one advantage for him is that he already had a shop that both businesses share so it saved money and they could share some expenses.
Whether you want to switch your independent business to a franchise system or you are looking to diversify with a turn-key franchise opportunity to help your business grow, Pet Butler may be the perfect fit for you. Learn more about Pet Butler by calling 844-777-8608 or visit us at www.growmypetindustrybusiness.com.