As the UK moves away from lockdown restrictions, businesses can start making solid plans for growth; diversification can be the most efficient route to take as businesses who spot an opportunity to capture a broader market and are the ones who flourish.
The team at private and commercial banking firm Arbuthnot Latham have provided a helpful guide for both new and old entrepreneurs with six tips on how to grow your business through diversification.
Know why you’re diversifying. Is it to reach a new market, add further value to your existing client, balance risk? There are many reasons to diversify and knowing your end goal can help you remain focused.
Have a goal. Whether that’s a new income target, penetration in a new market, units sold, or simply a timeframe in which to experiment. By setting a framework and identifying key metrics to measure, you’ll know if your diversification strategy is performing.
Ensure your plans align to your brand and values. By ensuring your new direction aligns to your overarching brand, you can be confident you’ll remain true to your core values. For example, Lego’s values are creativity, imagination, learning, fun and quality which are evident across all their products and experiences.
Buy an existing company. If you know the direction you want to go in and you recognize where you can add value and the price point is right, purchasing an existing business with expert colleagues, sound products and client base could provide the diversity you need with an immediate income stream.
Grow with your customers. You know your customers and they know you. By listening to your customers, you can develop new products and services to meet their changing needs.
Enjoy it. Business expansion through diversification can open many doors. Be open to new ideas, while remaining true to your core values.
When to start thinking about diversification
Understand where you sit in the market
“You might just consider your business proposition to be suitable to one sector or type of client but think if you can make small adjustments and enter a new market. This is how you begin your diversification journey.” Paul Beach, Head of Executives and Entrepreneurs at Arbuthnot Latham
Be able to spot new opportunities
“At first, the tangential leap from one sector to another will likely be quite small. But as you start to explore and understand new sectors, bigger opportunities might arise, ones more separate from what you are currently doing.”
“Key in this success is networking. Build your network, make connections with people in other sectors. Learn as you go, but make sure you become a valuable counsel on the way. Help people solve problems and always be agile and willing to adapt to new opportunities” Paul Beach, Head of Executives and Entrepreneurs at Arbuthnot Latham
About Arbuthnot Latham
Arbuthnot Latham & Co., Limited, whose business was established in 1833, is the London-based private banking, commercial banking and wealth management arm of the Arbuthnot Banking Group PLC, with regional offices in Manchester, Bristol and Exeter.
Arbuthnot Latham aims to provide a comprehensive approach to private banking, commercial banking and wealth management with its four core services; Private Banking; Commercial Banking; Wealth Planning and Investment Management.
Private Banking: A complete suite of Private Banking services created around clients’ lifestyles and circumstances include: deposit facilities, credit, debit cards, money transmission worldwide, money market deposits in major currencies and a wide range of treasury and foreign exchange services. All handled by a dedicated Private Banker responsible for the relationship of the client with the bank.
Commercial Banking: Full Commercial Banking offering to independent owner-managed businesses. The sector teams – Media, Real Estate and Specialist – all have considerable experience in their sectors and deliver a tailored and personal experience to clients from the London, Manchester and Exeter offices. The Commercial Banking team provides a range of bespoke lending facilities, deposit and FX management, a suite of Visa Card products and money transmission services all supported by online banking and commercial banking experts.
Investment Management: Highly diversified multi-asset portfolios managed predominantly under the Investment Management team’s discretion and designed around clients’ requirements. Free from restriction of affiliated products, Investment Managers strive to deliver risk optimal post-tax returns on clients’ wealth via a wide choice of management styles.
Wealth Planning: Based on a clear understanding of a client’s situation and immediate requirements as well as their long-terms goals. A Wealth Planner is assigned to work with clients to develop and execute a bespoke wealth plan, including retirement, estate and succession planning as well as insurance and tax planning issues.
For Business. For Family. For Life.