Recipe for Trouble: Expansion

Everyone wants their business to grow and everyone wants to make as much money as possible in their business. If they didn’t, they wouldn’t have started the business in the first place.

Starting a new business can be a long and trying process. It can also be expensive and it may take some time before the business becomes profitable. However, it is important to stay true to your business. You started the business with a particular goal in mind and with particular products. You developed this great business plan based on those goals and ideas. Maybe you even attracted investors with those ideas. And, actually, things are going well. Then it happens. This great new product comes your way. It has nothing to do with your current business, but it has great profit potential. So, you decide to add it to you current line of products.

Suddenly everyone is confused. These new products have nothing in common with the old ones. Your customers can’t quite figure out what is going on. If you have distributors or sales people in your business, they are confused as well. Their customer-base wasn’t developed with these products in mind. In fact, their customer base was developed with totally different products and ideas. Even though you are still selling your original product, the addition of the totally new and totally unrelated product can throw doubts into people’s minds. Is this company eventually going to stop making the product I like? Why do they have this new product? Is the company going to change completely?

Why add something totally unrelated to a successful business? Why not start another company for those products? You can certainly offer both to your customers and distributors, and you can even use the same successful business model for the new company that you used for your original company. By keeping them separate, you eliminate a lot of the confusion and questioning. The new products that you added may not be in compatible with the reasons that someone buys your products. For example, if you are a health and wellness company and you suddenly decide to sell tires, that is certainly going to be confusing to people.

People certainly understand when a company wants to take advantage of a new opportunity, but they also worry about losing the good thing they already have. Stay true to your mission and who you are and the profits will follow.

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