Diversifying in Business

Have you ever heard the expression: never put all your eggs in one basket? In business, this expression is highly regarded throughout the corporate and commerce world. Diversifying is an economical strategy that is used throughout a business, such applications being financial, management stability, and one of the most important for business- growth. Diversifying isn’t just for the big corporations, though. Small and privately owned business should also use this strategy throughout their business in order to be successful.

Diversification is regarded as the technique of spreading out activities and investments in order to spread risk or to expand. While this technique can be used throughout life, it is normally referenced to the business world.

Financial advantages

Consider the benefits that diversifying will bring to your finances. Even if your business is small and private, that doesn’t mean that you can’t spread your risks out in order to get ahead financially. Many corporations have the big bucks to buy out large portions of other mainstream businesses, but you too can reach out and diversify your business. If your business revolves primarily around marketing or selling comic books, why not also invest in selling movies, trading cards, and collectibles similar to your line of work? Some businesses may even find it lucrative to add separate portions to the business that are unrelated to their current business.

This diversification is not as extreme as buying out another business, but it does spread out your investment so that if comic books aren’t selling well, you still have movies and other items to fall back on. This stabilizes your business.


Chairs have four legs- and why? For stability, of course. That is what you’re looking for in diversification – the ability to stand as sturdily as possible. Many businesses will carry seasonal or cycling items or provide services throughout the year. While these are good investments for a time, you can’t sell Christmas trees in July (although there may be odd exceptions). So if you’re business is selling the good old pine tree, you probably won’t have much to do during the spring and summer. Diversification becomes the trigger point here, as it lets you lean on another leg of that reliable chair. Businesses spread out their income and risks by investing in other products, services, and even other businesses to maintain stability and provide new growth.

The advantage of growth

Growth is possibly the largest benefit that diversifying provides. Large corporations would normally consider the purchasing of stock in another business or buying up companies in order to increase profits and eliminate competition (although the trade commission has rules and laws regarding this). For the small business owner, diversification still provides growth through financial stability. Finding new ways to make sales spreads out your income amongst various markets. This growth adds to your business, making it stronger and more stable.

Diversification also allows you to test and get a feel for different areas of the market. While comic books might do well in some areas, movies and other items may cover a separate area of the market. Think of diversification as a spider’s web that can catch more flies the bigger and stronger it is.

Through diversification, businesses, even the smallest ones, can find ways to grow and become more stable. If you want to grow and be successful in the ever changing business world, you’ll need to spread out your risks and provide new areas for income and growth.