Branch out into unfamiliar territory, and you risk losing your core competency. This is a case study of how one well-known business tried to branch out for the sake of diversification but ended up in an expensive venture that didn’t turn its expected profit. The founder learned first hand about the challenges facing companies when they try to do something new and different from what has been working well for them.
This blog post discusses three key takeaways: 1) stick with what works 2) don’t be afraid to pivot 3) find a team member who can give you honest feedback on whether or not it’s worth investing time, money or resources into expanding your company’s services or products.
The takeaway? Learn from those mistakes so that other entrepreneurs will have less experience dealing with the fallout
The “branch out meaning” is a phrase that is commonly used in business. It means to expand beyond what you know, but this can hurt your business.
Many of the issues that might create roadblocks along the way are really self-induced as a small firm achieves momentum and begins to have some miles under its belt. You are, more often than not, your own biggest adversary when it comes to marketing and developing your brand.
Don’t let your brand become diluted.
For example, did you know that you might accidentally weaken and dilute your brand without even realizing it? This usually occurs when company owners become overconfident in their abilities. “Well, we’re perfecting these 30 second live video advertising, so let’s expand out and see how we do with animation,” or “Since we’ve got this vinyl lettering thing down, let’s see how well we can do with manufacturing engraved tombstones,” are examples of company owners’ thinking.
Of course, they are exaggerations (I certainly hope). However, it’s simple to understand how a company owner’s success in one area may encourage them to try new things in other areas. For a variety of reasons, this is typically a terrible decision. Not only does it suffocate your brand, but it also confuses customers.
By doing too much, the general public may get confused as to what your firm performs. Worse, it’s becoming increasingly difficult to see you as an expert in any given field.
Consider Virgin as an example. This is a firm that dabbled in a variety of fields, including music, railways, air travel, and even space transportation. While their desire paid dividends at first, their diverse regions started to fall apart in a domino effect. To assist finance other areas, Virgin had to finally sell the music industry portion of their business.
Worst of all, people started to be confused as to what the Virgin brand represented. Were they about space exploration, music, or something else?
Virgin is, of course, still alive and well; they are just too big to be wrecked by this kind of brand dilution. They are, nonetheless, a multibillion-dollar corporation. A small business’s exposure to such risk may be devastating.
How Can You Tell If Your Spread Is Too Thin?
If you’re worried that doing too many things has diluted your brand, take a step back and ask yourself the following questions.
- Have you begun to feel disconnected from your target market?
- Has quality degraded or taken a back seat in other aspects of your business?
- Have you ventured outside of your area of expertise to explore these other passions?
If you can respond “yes” to any of these questions, your brand may be deteriorating. To limit the harm, stay focused on why you started your company in the first place and resist additional temptations to branch out into other niches and sectors.