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Thursday, September 28, 2023

Focus on One Thing, or Diversify?

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A prevailing nugget of advice offered to new business owners is that it’s vital to focus on the one thing it’s good at, and perhaps focus on one sort of audience in the process. While that approach could be sound and well-intended, it also introduces a few problems. One is that for many, focusing on one thing or an offer for only one group of people can go against a natural grain to create and innovate. Secondly, having such a narrow and limiting offer might be risky for a business in today’s ever-changing world.

What may be the biggest challenge, though, is the conflict that’s introduced when there are mixed messages in advice — focusing on one thing, your niche, while also suggested that you diversify with multiple income streams. So, which is it? Should you have a singular focus and risk that one thing becoming obsolete in a changing world, or create multiple streams of income in order to more easily pivot?

Related: The Most Important First Step When Starting a Business

The question isn’t so much whether you should diversify a business; I think you should… it’s more of a matter of when. Because, until you have established yourself as being good at and known for one thing, introducing something else can add complexity that’s going to muddle your brand — not only divide your own focus but also cause confusion for the audience you need to be recognizable among. It’s very common, of course, for companies to introduce a new product line or service to rescue sales that might be lagging behind expectations. The trouble is: that’s almost always the wrong time. 

Let’s say, for example, that your women’s clothing line hasn’t taken off yet — is simply not getting the brand recognition or sales you’d hoped for, so you think of adding a cosmetic line. While it might seem they can support one another and in fact might be good companion product lines, the problem is akin to hitting the flipper on a pinball machine: You just shot the ball in another direction… were specializing in clothing, and now it’s also cosmetics. Until that core product line or service has taken hold, adding a second or third can be too much too soon. It’s best to be well known for one thing before you introduce another.

Does that mean you can’t start off with multiple product lines or services? Absolutely not, as long as the multiples are held together with a single brand message under one umbrella of offerings. For example, a men’s salon opens incorporating the usual haircuts and shaves, while also offering the less typical services of custom clothing and teeth whitening. A variety of services and products, yes, but with a single focus on men’s appearance and with a single brand message — perhaps something like, “All a man needs to look good in one place”.

Related: 3 tips you should read before diversifying your business

Then imagine, in that same scenario, the enterprise opening as an exclusively haircutting service, but before that really took hold, a custom clothing option was introduced. You could imagine people asking, “Which is it… haircuts or custom clothing?” Yes, they are companion products, but the risk is in creating confusion and complexity, because one service did not take full hold before a second was introduced.

Therein lies the answer to what has become an age-old question: Should you focus on one thing? Because so many business gurus have told us that “the riches are in the niches” —that the only way to ever be successful is to be single-concept laser-focused, while others have offered that it’s best to diversify, to offer a multitude of products and services to a variety of audiences, and so protect against inevitable change.

In short, the answer to both is “Yes”, but do it in good time. 

First, establish the brand and its core offer. Be excellent at it and wait until it almost sells itself, then introduce additional products and services. Think about many brands that now have a tremendous variety in what they offer (Apple, McDonald’s, Starbucks), yet you are still able to identify the one thing they were best at first. On the other hand, does anyone know what Sears originally stood for? Sure, it offered a lot — started with Sears Homes, then seemed to specialize in clothing, but over time gained more recognition for appliances. Yet in the end, nothing was recognizable enough to withstand the introduction of so many other product lines. It’s a shame, but no great surprise, that the company recently announced that it will be closing the last Sears store in the very state, Illinois, where it has been headquartered since being founded in 1892.

Related: To Build a Powerful Brand, Begin on the Inside and Move Out

So, focus until you are well-known for a core offer, and until brand recognition takes hold. Only then will you have gained the freedom to add multiple streams of income, establishing yourself as a growing business and creating enough diversity to ensure that it can withstand the inevitable changes to come.

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