Insights — Channel Creation & New Revenue Streams — 3 min read
How Can I Diversify Business Revenue?
Diversification is a defensive and offensive strategy for building a resilient B2B company.
In short
Diversify revenue by adding streams that are either non-cyclical, service a different market, or leverage existing assets in a new way. Start by creating adjacencies that share your current core competencies, ensuring each new stream satisfies your margin and cash-flow requirements. Avoid the trap of becoming a 'jack of all trades' by maintaining a focus on where your business has a distinct competitive advantage.
Relying on a single product, service, or customer type is a massive commercial risk. If the market shifts or the relationship sours, your entire business is threatened.
True diversification is not about doing 'everything'; it is about adding revenue streams that hedge against risk and complement your core expertise.
The diversification trap
The biggest risk in diversification is losing focus. When you try to be everything to everyone, you end up being nothing to anyone. Successful diversification uses your existing 'central' strength as an anchor.
- Vertical diversification: Moving up or down the supply chain.
- Horizontal diversification: Selling the same product to a new customer segment.
- Market diversification: Entering new geographies.
Could your business support another route to revenue?
Evans Channel Creation identifies, validates and builds additional revenue channels from capabilities a business already has — B2B to D2C, D2C to B2B, product to service, recurring revenue or partners — and says so plainly when a channel should not be built. Programme from £1,995 + VAT per month over six months.
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