Diversify Your Business

I had to laugh when I saw this headline on the business newswires recently: “Publisher Bloomsbury sees life after Harry Potter.” Talk about riding the wave; since their debut in 1997, hundreds of millions of copies of the eight Harry Potter books have been sold, reaping bountiful profits for its publishers and deserving author, J.K. Rowling.

As we all know, however, the Harry Potter tale has concluded and life must go on without anticipation of the next title in the series. But what does a business owner do when he or she has enjoyed a home-run product whose boom has run its course?

You might be in a similar position. Perhaps you have a short list of clients whose travel could keep you going 24 hours a day. There might be one individual in particular who is your prime source of income. This is your A-lister, the person for whom you stop everything when his phone call or e-mail arrives.

If this sounds like you, it’s time to proof your business so you don’t suffer a hard fall if clients steer their business away from you for some unimaginable reason.

After all, clients are consumers, and consumers are changing their preferences all the time, due to external factors, and emotional influences as well. Take a look at what auto manufacturers are enduring with the slowdown in demand for full-size SUVs. First, the dramatic increase in the price of gas took its toll on the sale of these fuel-guzzling behemoths, now it’s the slowing economy. I suspect it’s also the result of a “greener” consumer, who is now demonstrating a desire for smaller, more efficient vehicles. While Detroit can certainly produce these easily enough, it’s the large sports-utility models that pull in higher profit margins. As a result, Ford’s marketing chief, Jim Farley, is calling the current scenario "a very challenging external environment, reflecting a seismic shift in consumer preferences."

My message here is that it’s smart to diversify. While you can ride the wave of a very lucrative client, be certain at the same time that you’re propping up your business with other revenue sources so you’re not left high and dry if the scenario changes.

The above-mentioned publisher, Bloomsbury, reports that it has a new roster of titles waiting in the wings, which is expected to keep its income levels healthy (including a new Margaret Atwood novel, which I can’t wait to read). These books may not grab all of the attention and establish themselves as the runaway blockbusters that the Harry Potter portfolio proved to be, but they’ll keep profits growing.

So beef up your roster list with sure and steady climbers. Who knows, you may be cultivating tomorrow’s star client!