Diversification – The Baking Powder of Your Business

Don't Put All Your Eggs in One Basket!

Imagine you're at a bakery, selecting a cake. Would you choose one with a single flavor, or one that delights with a medley of tastes? Your business should be just as flavorful! Diversifying your client base and product offerings is not just a good idea—it's essential! It's the baking powder that makes your business rise, adding stability that buyers crave.

Why Is Diversification Crucial?

When you rely too heavily on one client or one product, you're walking a tightrope. A sudden shift in the market or a client's decision can send your revenue plummeting. Picture this: what if your biggest client suddenly goes dark? Would your business weather the storm, or would it crumble?

The 15% Rule

Here's a quick formula to remember: no single client should contribute more than 15% of your total revenue. This keeps your business resilient. For instance, at Contrarian Thinking, we service over 5,000 clients annually. How many clients do you have? If your answer is less than 15, you might be risking it all on a few eggs.

Diversify Your Revenue Streams

But diversification isn't just about clients—it's also about products. Adopt the 60% rule: ensure that no single product accounts for more than 60% of your revenue. This approach helps guard against market fluctuations. Imagine if a beloved product suddenly loses popularity? Your revenue could take a hit.

Real-Life Example

When we first started at Contrarian Thinking, we relied heavily on advertising revenue, banking on just 20 clients. If our advertisers pulled out, so did our cash flow. This taught us a valuable lesson about volatility. Now, our revenue comes from a mix of sources, including info products and services. This approach not only stabilizes cash flow but also makes our business more appealing to potential buyers.

Are You Ready to Diversify?

Ask yourself: Are you ready to expand your offerings? What new services or products could you introduce? Diversification isn't just a safety net; it's a way to enhance the value of your business.

The Bottom Line: Stability Equals Value

Buyers want to see stability. A diversified business is a stronger business, ready to tackle challenges head-on. So, what's stopping you from diversifying? Don't wait until it's too late—start planning now!