KickStart: BEFORE you diversify into a new service STOP🛑 and ponder on Steve’s ‘8 Introspective Questions’!
di·ver·si·fy: “enlarge or vary the range of services or products of a business.”
Hmmmm… does diversifying sound good? Maybe. As with so many undecided business questions, “It all depends.” Above all else one not-so-simple question…
Will this diversification be ‘synergistic’?
I’m all about word definitions today so let’s examine: syn·er·gism: “the total effect is greater than the sum of the individual parts”. And this should be your goal with adding any new service to your residential services company!
WARNING: I find most Residential Services company’s diversifications are motivated by the owner’s a) ‘entrepreneurial boredom’ and/or b) falling prey to the ‘grass is greener’ syndrome. Or as my business mentor told me 40 years ago…
“The classic definition for most small business diversifications? ‘Let’s search for something new to fail at’!”)
I’ll happily bestow my blessing on your future diversification(s) IF you can answer with a resounding, “YES, Steve!” on all eight of these ‘synergistic questions’:
1. Will it distract me from my ‘core business’?🤔 As the song goes, “Dance with the one who brung you!” Neglect your main business (and existing clients) playing with this new ‘shiny, bright toy’ at your peril!
2. Can I offer this new service while onsite doing other work? I call this ‘upsell’ idea Additional Service Options (ASO’s). Trust me, ASO’s can be a HUGE way to add profits from your existing clientele.
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3. Can my existing employees perform this new service? Or will you need to add highly skilled new workers? (This will usually make the new service a non-starter for me.) Also, what’s the learning curve? Are you going to increase your complaint ratio?
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4. Is it going to bring in ‘virtually obscene’ new profits? 💲💲💲 Or can you get a better ROI elsewhere? Including expanding the market/service area of your current services?
5. Can I piggyback on to my existing marketing? If so, this will really help you with a give a big 👍 up to question #4 above!
6. Might this new diversification bring in a new ‘customer demographic’? If so, great! Who knows- this new service could eventually become ‘the tail that wags the dog’!
7. Will this diversification fit my image as a Home Services Provider? Adding another residential service that meets questions #1-#6? Maybe. ‘Diversifying’ by opening a taco stand?🙄 Much as I love tacos I’ll give you a huge 👎 on this one! And most importantly…
8. Am I prepared to invest the required start up time, energy and effort? Why this question? Because too many of my student’s shops are cluttered with ‘expensive anchors’ gathering dust. Yep, all equipment that was impulsively bought with much excitement to diversify into a new service. What happened? The dreaded Entrepreneurial Boredom struck once again! Don’t be this guy!😣
Did you trudge through all eight of these tough ‘introspective questions’ with me?😲 If so, CONGRATULATIONS! (We ARE talking about the future financial future of your family here!)
BEST WISHES💖 and let me know how I can help!