Why Diversification often beats "focus" and quickly adds more revenue
The concept of "focus" is very popular, but often DEAD WRONG for many people.
I have a motto that has served me VERY well through life.
“It’s always good to have a few irons in the fire.”
I believe that for most people, having a few product lines (or even diverse businesses) is the surest path to bigger financial wins.
For some reason it’s not a popular idea. And I think that’s a shame.
Most gurus teach that you really should FOCUS on one thing, cut out everything else, be fanatical about driving forward that one thing, put everything into it. But for a LOT of people, that’s not working. At some point you have to realize that this isn’t always the best advice.
To me, it’s actually MORE effective and LESS risky for most people to diversify. For the majority of people, they would be better off if they had a few irons in the fire. Let me tell you why.
#1 - Your chances of reaching your financial goals (revenue, profit, cash flow, income, etc) increase, and it happens for a few reasons.
Let me tell you how I did it when I was getting started, and how I continue to do it.
When I started my business, I was working as an outsourced CFO. It went pretty well and I kept the lights on. But I found it to be a grind, and I knew I had to try my hand at some other things if I was going to reach my income goals.
Within my first couple years I had launched “side hustles” that were bringing in revenue in:
Marketing for construction firms - had a couple clients, but didn’t take off
SEO services - had a few clients and made good $ for a year, but realized this wasn’t for me
LinkedIn marketing - ended up going bananas and turning into a big company, LinkedSelling
Flipping houses - not my forte, but made a little money
How could I do all of that AND have a base of CFO clients as well? Where did I get the knowledge to even do all of that different stuff?
To answer the first question, I was pretty busy for a while. But I was making great money, and I was trying to figure out which one of these businesses had the potential to take off. And so I knew I could keep on having this “house of brands” and just have a few different services that I offered. Or, maybe one would take off big time. Either way it was a formula for success, and it worked easily.
But where to get the knowledge to ramp up multiple businesses or product lines?
The key is finding business opportunities that require a specific bit of secret sauce that most people are unaware of. These things exist all over the place. You can usually acquire the knowledge quickly.
By being active in the local business scene, I had a good read on what the buzz was and what kind of things I could market to other businesses.
Take SEO services for example. When I started doing this work, it was 2011. I knew that many people needed help with this. As I started my own CFO business, I became aware of a handful of tricks that SEO guys and gals used to optimize websites and get them to rank higher. This was back in the day when you could still easily do things like on page optimization and backlinks, and get a site to rocket to the top of Google. I figured out a handful of tactics, and then I started helping other businesses do it. Now, this business didn’t take off for me. But for a while I was bringing in a few thousand a month from a few clients…and that was pretty great for me at the time.
The point is, you can figure out how to do something that people need, and quickly turn it into a marketable service.
(QUICK DISCLAIMER: I am a big believer in not spending much more than $2-3k to launch a new thing. If you are looking at diversifying and you have to empty the piggy bank to start a new thing…that is too risky for me. Keep it lean.)
#2 - Sometimes growing your existing thing is going to be a lot harder than spinning off a new service. There is not much risk to trying new things, and at a minimum you create a good side income. Cobble a few of them together, and it really adds up and could produce more revenue than your main thing. That happened for me.
#3 - Another thing I like about the diversification model is that it REDUCES RISK! When you have more irons in the fire, you aren’t dead in the water when one stops working. Because you have mutliple streams of income. This is super important in today’s environment with how fast paced and crazy things are.
#4 - I also LOVE that it gives me the opportunity to do new things. I get a little bored if I’m talking about the same thing over and over again. I like new things and new challenges.
And so, you can see that there are a lot of ways to skin the cat and reach your goals. A lot of reasons why having a few irons in the fire is a winning strategy.
You may love the work you do and want to do nothing but that. That’s fine too, we all get to decide how to chart our path. There is no right or wrong.
Or, you might decide to put a couple more irons in the fire, and I don’t think there’s any downside…but a lot of upside.
I’m going to be talking about this more this week, and sharing some more ideas on how to do it and what to look for.
Thanks,
Josh
P.S. It’s a holiday week here in the USA! But before we take off for bbq and fireworks, my buds and colleagues Ryan and Tim are joining me this week for another episode of our show MOSTLY BUSINESS.
We’re going to be talking about new income streams and side hustles, and more.
Join us Wednesday at noon central!
Here’s the YouTube link:
Or join us on LinkedIn:
https://www.linkedin.com/events/mostlybusinesswithjosh-ryan-and7213531101464514560/theater/