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Stefania Aulicino

In unstable economic times, when sales are harder to close, the worst thing an innovative company can do is diversify.

Specialize on your core competency.
Go deeper.
Go wider with different features.
But don’t move away from your core competency.

Steve took care of wet basements for home owners.
He tried to diversify to realtors—bad news. Realtors were just agents, not at stake for living in the home.
He tried to reach out to commercial buildings owners- more bad news. They had union requirements and a different decision-making process.

Success was the result of refocusing on his original market. Steve had gone into business because he discovered that wet basements were much more than an inconvenience. They were unhealthy for the people who lived in the house above. Steve was passionate about healthy basements so people could live in healthy buildings.

Instead of diversifying, he specialized his attention on the home owner, since that is the person who has the most at stake. The result was a surprising number of all kinds of new revenue streams.

Air quality – services to test the result of successful dry basement
Drainage solutions- equipment like pumps and batteries to address emergency situations
Specialized construction products – used to keep moisture at bay
Training- for home owners- to know their choices and options
Training for contractors – to know what solutions there are for different problems.
This last category use to be “competitors” but Steve realized the geographic nature of his market and decided he could help homeowners more broadly if he could help contractors beyond his own reach.

Steve did not engage in diversification. This is specialization.

Diversification, not putting all your eggs in one basket, is good for a stock portfolio to manage risk but not good for building a business.
Specialization is how to get more value based on what you do best.

How can you apply this approach?
1st- what business are you really in?
2nd what is specialization for you?
3rd how many new income streams can you think of?

Steve is now a magnet for new solutions for homeowners.
Sometimes he is the creator of a product or service; sometimes he just becomes the market educator (source) with his specialized knowledge.

Notice, Steve does not have to deliver the solution to earn income. He can deliver knowledge of options, he can offer knowledge of problems, he can offer quality specifications of which other vendors are best for a problem, all of which is important to the homeowner and all of the other players in the eco system benefit. That makes for lots more customers for Steve, but without diversifying, when you think in a new more broad way about specialization.

Stefania Aulicino, president of CapitalLinkUSA ensures business owns get cash to keep control of a bigger, more profitable company, faster, safer than they ever thought possible- in any economy. Become a magnet for non equity and equity sources to fuel your growth. Explore our tools, solutions and consulting options tailored for different growth stages and different budgets: www.CashAndControl.com