Diversify - the key to success

Most business could survive the recession if they adapt what they do, or how they do it, explains Peter Savage
In the current economic climate, with the market shrinking, every business has to look at ways of growing or developing – if they are to survive. And sometimes you have to think outside the box.
There is, as they say, only so much blood you can eke out of the proverbial stone. That means thinking smarter, looking at which areas of the world are still doing well and then thinking about how to use existing skills, in existing markets, in ways that will help your business develop in those markets.
Which markets provide opportunities?
Ok. So which markets are still developing – or, at least, holding their own?
Well, it’s not the UK and Europe, or Eastern Europe, or the US as these are all in recession. But China’s economy was recently reported to have grown by eight per cent last year. And most oil states are still doing very well because of the price of crude. Is there an opening for you there?
To give you a real-life example of what I’m recommending, we looked at what we, as a financial services company in the UK, could do to capitalise on these developing markets. And we came up with an import-export finance business, specialising in emerging markets and based around broadcast manufacturers that are looking to sell kit to countries where there is still a demand. In a couple of months’ time I will give you an update on whether this company has taken off, but I can tell you that, even at this early stage, we are already looking to do some business in August that could radically change our outlook and our future.
How does this help you in your markets? Well, and obviously, if you are an exporter of goods we would love to hear from you but that’s not the message of this article. The message is that sometimes you have to re-invent yourself, diversify, or look at new ways of cutting the cake.
Look back to see the future
I have spoken to several people in the UK broadcast market and most of them are saying that the model we have all been working to for the last 20 years is now flawed. People simply are not paying the rates that allow companies in our industry to make a living.
And the difficulty is that the older people are, or the longer they have been in their industries, the more difficult it is to see a solution. Look at ITV, C4, Channel Five and even the BBC. All are being forced to look at ways of diversifying to find new income.
I think this is especially true and more difficult for the 40+ category (I’m talking age, not waistline). Most people in this age group have been doing roughly the same job for 20 years – and have earned well out of their skill. The difficulty is that they all find themselves now with the double whammy of a negligible income and a pile of assets that is basically worth little to the new-age industry. It is these guys (me, too) who have to ask themselves, “Well, if I were 20 years younger, how would I make money in today’s market?”.
A real-life solution
As always, my top tip is to talk to other people – to find areas where you can generate demand or, for example, share resources. Two of my clients have recently started sharing drivers and premises. Demand is such that they only need one driver between them so sharing allows each of them to halve their costs. This has significantly reduced their overheads and brought them back in profit, despite them being in what everyone considers is a competitive market. If they get busy again, both the owners will do some of the driving, to help the existing driver – until they get so busy that they need to go back to employing a driver each.
That’s what I mean about asking yourself what you would do if you were 20 years younger. Like them, you would probably instinctively do whatever your equivalent of the driving is yourself – to avoid keeping too many staff on your payroll. And what also happens when you do the driving, is that you may well meet a client face to face and, seizing the opportunity, perhaps ask if there is a product they need that can’t be supplied. A new market may open.
An idealistic view?
If you think this is too good to be true, it is exactly what happened to us. A client needed a skill that was not being supplied. I contacted another of our clients for advice (yes, we also ask other people for advice) and this client told me how to solve the other client’s problem. Now we are in business together, taking this new export finance product to the market as no-one else offers anything like it.
Might this approach work for you, in your business?
Good luck as you think out of your box. And please, please, as I always say … don’t take the downturn and its effects personally as there is life outside work that can ease today’s current pressures, if you give it time to do so.
If you need more information on how to think laterally about your business, or want advice on exporting to other markets, do contact me: peter.savage@azule.co.uk.

Tags: azule | iss032 | finance | business | recession | diversify | N/A
Contributing Author N/A

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