For a small business to gain momentum, it needs a diverse range of clients. Thriving clientele is a sign of quality for potential new customers, and furthermore, relying on just one or two main clients can be extremely precarious (and puts you in a poor negotiating position with them). A diverse clientele means that if some clients fall away, you have plenty of business to fall back on.
“Businesses get comfortable,” says Andrew Griffiths, author and small business expert, “and get used to customers coming their way. When the market changes, they are left with a declining customer base. To create a resilient small business, diversifying your client base is essential.”
Here are five of Griffiths’ key ways of doing so.
Increase online presence
Establishing an online identity is among the first things a small business will do in its early stages. However, this is an ever-evolving process that must adapt constantly, particularly if diversifying is a priority.
“This might mean having several different websites to promote to different markets, and targeted advertising on social media,” says Griffiths.
Partnering with other organisations with a similar target market gives you access to their customers.
“Partnering with other organisations with a similar target market gives you access to their customers,” says Griffiths, “as long as there is something in it for them, such as cross-referral.”
In this scenario, it is the partner business’s target demographic that must align with your aims, and not, necessarily, what the business provides.
Introducing a new product or service can be effective for diversification. Alternatively, you could just tailor an existing product to a new market. This could mean creating an app to appeal to Gen Y and millennials, or offering your product or service in a different language.
“A business’s target market might remain the same, but opportunity exists for them to expand their business geographically, especially in the online age,” says Griffiths.
A new region can be tapped into by investing in promotion in that area, tailoring your product so it is regionally themed, or even opening a new branch in a new community.
Diversification should take many forms, and it will not happen overnight.
Griffiths says, “A multi-pronged approach is best – don’t rely on one activity to diversify. I come across businesses all the time that tried to diversify by placing one advertisement in the local newspaper. It didn’t work, so they say diversification didn’t work. It needs to be strategic and you have to give it time.”
Barnaby Smith is a writer and journalist who has written for a variety of publications across several subject areas in the UK, Australia and Switzerland.