Why You Should Diversify Your Business Portfolio As An Entrepreneur

Economic cycles are inevitable. Diversifying creates multiple revenue streams, which can help buffer against downturns. It’s crucial for long-term success because it helps you confidently handle the ebbs and flows of the business cycle.

Weathering Economic Storms

I experienced the brunt force of the downturn in 2008 as an owner of Big Sky Enterprises, a construction company, which was my only business at the time. Between 2008-2009, we went an entire year with ZERO revenue! Even worse, we weren’t prepared for it with sufficient savings. We were one month away from bankruptcy until we landed two shovel-ready projects out of nowhere. Praise the Lord! What a lesson this experience taught me.?

Building Financial Stability

Fast forward to 2016; Big Sky was doing well. I was saving more, investing more in the market, and opening up other companies, some of which I closed because they didn’t deliver the ROI for the time required. Then, I started a logistics company, Global Post Auditing Solutions, with my brother and a friend of ours. Our partner was an expert in post-auditing freight payments but never owned a business. It was the perfect match for all parties involved. I was able to live off of Big Sky while reinvesting into Global. This allowed us to build the Global team, which I knew would pay dividends in the long term. Each year, our revenues increased, and in the third year, we were starting to reap the rewards of our investment.?

Real-Life Impact of Diversification

Then came Covid, and companies were divided into essential and non-essential. Big Sky was impacted once again because we had multiple non-essential projects. But the good news for us this time was that Global was experiencing its best year to date, which allowed me to shift my income to Global and not Big Sky to keep our team intact. This example is why diversification is critical.? My newest venture, MikeRegina.io, which I started a few years ago, allows me to diversify my portfolio once again. Another industry. Virtual. In-person. Digital products.?

Strategies for Effective Diversification

1. Identify Synergistic Opportunities: Look for businesses that complement your existing operations. For instance, my experience in construction provided valuable insights into logistics, making it a natural fit when I ventured into post-auditing freight payments. Leveraging your industry knowledge in new but related areas can increase your chances of success.
2. Invest in Different Markets: Don’t put all your eggs in one basket. Spread your investments across various industries to reduce risk. This could mean venturing into digital products, virtual services, or even different sectors. Diversification allows you to tap into other market dynamics, ensuring that a downturn in one doesn’t spell disaster for your overall portfolio.
3. Build a Strong Team: Collaborate with driven individuals who bring unique skills to the table. When starting Global Post Auditing Solutions, my partners and I combined our strengths—industry expertise and business acumen. A diverse team can navigate new challenges more effectively and drive your business forward.

Taking Action

The opportunities for diversification are endless. Here’s how you can start:

• Assess Your Current Business: Identify areas where you can expand or branch out.
• Research Potential Markets: Look for industries that are growing or have unmet needs.
• Plan and Execute: Develop a strategic plan for diversification and take actionable steps.

Diversification requires forward-thinking, adaptability, and a willingness to take calculated risks. By diversifying your business portfolio, you can create a resilient and dynamic foundation for long-term success. How are you going to diversify your portfolio today?

Empower yourself to take bold steps, explore new opportunities, and build a future-proof business.

Now, Go Forth and Conquer!

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