With many businesses of all sizes experiencing financial difficulties, redundancies and even entering administration amid the coronavirus pandemic, businesses may need to diversify their offering to stay afloat and keep ahead of the competition. In this article, we explore some ways to diversify your business during and after Covid times.

Identify new markets

A simple way to diversify your business is by looking at new markets and identifying market opportunities. A market opportunity is an area of an industry where something or someone is not being addressed by existing businesses, and this is an opportunity for you and your business to exploit these.

New markets and marketing opportunities can allow you to use your current product or service offerings to leverage gaps. Identifying a new market opportunity can be done by looking at the following:

What are the needs of the consumer?
What are other businesses in the market doing?
Does your product solve a problem, or enhance an existing solution?
What is the current state of the market?

Another way of gathering these insights is by creating a SWOT analysis for the competitors in your current market, or for businesses in new industries. For each business, look at the Strengths, Weaknesses, Opportunities and Threats they create. This will highlight not only gaps in the offering of individual businesses but will also allow you to identify wider market trends.

Create partnerships

One of the most cost-effective ways of diversifying your business is by creating partnerships with other businesses. Partnerships are created to be mutually beneficial, and you can team up with other companies in the same industry as you, those in a different industry or even businesses in other countries.

By creating partnerships with brands who sell complementary goods and services to your own product offering, both companies can utilise market data, marketing materials and customer insights to drive sales without the need for significant R&D, product development or marketing resources.

Partnerships can work in several ways. You can each become resellers of each other’s goods and services (using various commission structures); you can simply promote each other’s products to your respective audiences; or you can combine your product offerings to cross-sell and upsell a new package to your customers.

Another perk of partnerships is by offering multiple goods or services to one customer, it’s harder for them to leave to find a similar level of service or package with one of your competitors. Therefore, making your total offering more ‘sticky’, and encouraging brand loyalty and a reduction to churn rates.

Look for new product opportunities

If your current product or service offering isn’t recession-proof, it might be time to start looking at new product opportunities.

To get started, it’s important to come up with something that is viable, that demand can be gauged for. There are a few ways of doing this, one of which is looking at Google Trends or Google Keyword Planner. As the largest and most widely used search engine in the world, Google’s data is the most likely to give you an accurate sense of product viability. Both of these tools allow you to input certain keywords or phrases and will give you an idea of the level of interest over a certain period of time (as defined by you), as well as related topics to that keyword or phrase.

When looking at new product offerings, consider the following:

Who is the target audience?
Where are the audience/what’s the target market?
Does something like this already exist?
How is this different to what already exists in the market?

Consider additional delivery channels

Coronavirus and recessions are often big drivers of innovation. One of the best ways that companies innovate during these times is by altering their delivery channels – allowing them to continue to create and deliver their current product or service offering, but with a tweaked method of delivery.

The Board of Innovation has put together a spreadsheet of businesses that altered their business models during a recession which includes a range of successful diversification methods that businesses have adopted, including creating new products, serving additional target audiences or creating new distribution channels.

A common route that hospitality businesses, who have particularly struggled in the crisis, have taken is food delivery services – using their staff and resources to deliver essential items such as milk, bread and toilet roll to customers.

To conclude, the coronavirus pandemic doesn’t have to mean the end of your business. By evolving your product range, complementary products, your target market and your areas of operation, you can successfully diversify your business offering.