Every entrepreneur dreams of their company, or companies, thriving in a wide variety of sectors. Companies like Virgin perfectly exemplify a business that has permeated a huge range of sectors starting as a small record company to expanding into transatlantic airlines, trains, banking and most recently, spaceflight. It’s no surprise that Richard Branson is a business idol for many young and old aspiring business leaders.
However, Richard Branson needn’t be the few. Entrepreneurs with a true understanding of their industry and customers can successfully expand further afield. It’s always an exciting time moving into a new industry or sector, introducing and proving yourself to a new audience. If you have a passion to learn and keep learning you’ll always have the drive to succeed, however, there are a few tips that any business leader should consider when making that first jump.
When I expand into any new sector, I always make sure that I have some experience, whether it’s as an owner in a similar sector oras an interested customer. The person running that business day to day, must have years of experience, so I can challenge them at every stage and learn along the way.This can range from nightclubs, to law firms and property development companies; none of them are the same, they all work in mysterious ways, but all have a common mission: increase top line and trim the bottom line without negatively affecting service. As a customer, you know how you want to receive a service, or a product.As a business owner, you want to give your customer the best experience possible to keep them loyal. Balancing what is in your interestand the interest of your customer is key. Additionally, be aware of how different customers are in different industries, what may be of interest in one might not be the same in the other.
If you create a strong sense of loyalty among your existing customers, and you enter a complementary sector, they may well follow you on your new ventures. Building a strong reputation in your existing sector, one of trust and reliability, could ensure a cult-like following if you can develop a strong overarching brand, creating an automatic revenue. People buy people and there is nothing better for company growth than word of mouth.However, once you’ve expanded into another sector make sure not to forget your original core customers. They are your ‘bread and butter’, and usually most loyal and without them you wouldn’t have been able to expand in the first place. A strong ‘fan base’ is your most valuable asset and could put a zero on the value of your business.
Occasionally, your existing business venture isn’t suited to the new industry you want to become prominent in. What you can do instead is buy or bolt onto an existing business and immediately cut combined overhead. For example, I was working with my solicitors and when I noticed that they were struggling, it made sense for me to buy them and introduce a new entrepreneurial flare and team. This allowed some of the partners to retire and fresh, hungry talent to replace them – a perfect way to boost a company’s profits and introduce yourself into a new industry.
Although a company might be struggling when you take it over, the core business is there and buying income could give you a much needed head start to add your start up alongside, all it may need is restructuring which gives you the head start when learning a new industry’s tactics.
Don’t manage everyone
There is a lot of misconception about the leadership etiquette for managing multiple businesses. Many try to do too much and become the CEO, MD and Chairman of all the businesses. This isn’t usually the most effective way and they are different roles for a reason, that they are different job types. This could actually become detrimental to the development of your business. Understand your strengths and weaknesses – you may be an expert in your existing business, but this doesn’t mean that you know everything in your new venture. Create a network of trusted experts such as friends or mentors to get their insight of how a new industry would work. These people, or existing people in the business if you’re taking over a company, can become great leaders of your companies. There is nothing more precious than time and giving these businesses the time they require and so rightly deserve will make sure that all of your businesses succeed for the long term.
Ultimately, all successful businesses have strong numbers, a solid management team and a mid to long term plan or exit. If you can add value and growth to an existing company or bring a new perspective to the market, the most important thing is to make sure it is something you have a passion for. Entrepreneurs are typically not detailed people, and you will invariably make expensive mistakes in the first months or year, and that passion is needed to ensure you stick at it, and don’t give up. If you do make it, the reward of operating successful and profitable businesses in different sectors is immense. You will have a sense of pride, safe in the knowledge that no one can call you lucky, or a one trick pony!