Diversify Your Revenue
You’ve heard how you shouldn’t “diversify a portfolio” — or “don’t put all your eggs in one basket” — this is common knowledge for all things “Money 101”. So do businesses apply this same logic to their revenue?
Most businesses diversify their offerings through different products or services. Most businesses diversify their client/customer list by ensuring each buyer-type (demographic, etc.) doesn’t take up too much of their revenue so they avoid becoming dependent on this individual. This is great. These are basics to running a business and ensuring you don’t get the rug pulled out from underneath you. (Ouch)
I’d like to offer a different diversification concept for growing and protecting your revenue stream in the present and future.
Through brand, you will be more in-tune with your audience and their behavior (Read more about the Influence of Audience Behavior), and this will allow your business to “hedge your bets” of your current market position.
In other words, the ways to diversify I listed above are all “present” options. They are focused on the transactions you’ll do today and yesterday. To help protect this position (and your business), you need to have some investments in the future state of your market.
Here…let’s talk about investing. Yes, you have invested money, blood, sweat, tears, and maybe your first born (within labor laws) to your business so far.
This beautiful investment that you are so proud of not only has a great flow of different customers, but also a variety of products and services — Your investment portfolio (business) is diversified. Awesome.
The next level an investor takes is to hedge an investment through futures. What the heck does that mean? Well, imagine it’s like a Plan B. Through your brand projecting on what might become of the market you serve, you can be imaginative and think of ways to potentially serve their future needs.
For example, prior to the emergence of Covid-19, Starbucks and Chipotle were both rolling out pickup/delivery in anticipation for where the market was going (like 2 years early). Then everything hit the fan with COVID and that hedge played out very nicely for them because — coincidentally — COVID was a catalyst for the market’s immediate desire for pickup/delivery.
Through brand-focused maneuvers, these companies took a pulse on the future state of their market’s desire for an increasing demand for pickup and delivery.
Similar to how Netflix — which started as a DVD delivery service — saw the early market need for online streaming. By understanding the importance of not where the market currently was, but where the consumer behavior was heading, they were able to start rolling out streaming and testing the technological limits at the time.
In both cases, the hedge wasn’t a matter of changing what they were selling or investing in, but rather how they were doing so. From in-store to pickup/delivery and physical discs to digital stream. This is what a brand does. (Read more in our Not What You Do, But How You Do It article)
It’s great to diversify your portfolio/business for the present, but remember to unlock the protection and strategy that comes with hedging your business through brand.
Originally published at https://ournegative.space