Diversifying your client base can offer incredible opportunities for your business, and can serve as a way to protect your business from revenue fluctuations, create ongoing growth, and increase profit. However, issues can arise when business owners only cater to specific industries, rely too heavily on “larger” clients, or require a deeper knowledge of their targeted clients.
Instead of putting all of your eggs in one basket, seeking a more diverse client base is the best possible option to encourage better opportunities for your business’ success. Here are three ways in which you can ensure greater profitability in your business by diversifying your client base.
1. Ensure that you have all types of clients in your roster
When you look at your existing clientele, what do they have in common? Many business owners share with me that they target only one industry. Although it may be easier for business owners to find and target these customers, putting your focus on one industry can put your business at risk.
For example, if a downturn impacts a specific industry from which many of your clients are based, your business will more than likely experience an impact from that downturn. I’d suggest lessening the impact by having a client base that caters to a variety of industries, which can be an essential aspect of keeping your business on top of any potential challenges.
Ultimately, targeting clients in a diverse range of industries can help you maintain your profitability during more challenging times, and reduce your risk of reduced profitability for your business’ future.
2. Have several smaller clients
Many business owners put a lot of their hard work and energy into targeting and maintaining large clients. While financially, this may make sense off the bat, the risk factor to your bottom line can be greatly impacted.
By adding several smaller companies to your client list, it will help you mitigate that risk, as well as protect your bottom line, if one of your larger clients was to leave. Smaller clients allow business owners to maintain a certain level of income, internal resources, and equipment without it impacting your bottom line.
3. Create a targeted client list
One thing that I’ve encouraged many business owners to do is to create a more targeted client list. To begin, this could simply mean defining your ideal client or customer. However, as you start to look at your current customer base, your targeted list could begin to include more “big picture” ideas.
Is there a service or product beyond what you currently offer that you think would benefit your clients? Opportunities for innovation can be an exciting and valuable endeavor for any small business, especially ones that are looking to diversify their existing roster. I find that thinking outside of the box and examining new industry trends and possibilities can offer you a more profitable means of engaging a wider range of clients and customers.
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