Business strategies tend to be designed, and subsequently shaped by, minor course corrections, so as to drive enterprises along the most expedient route to a given goal. The primary goal is attaining the success measure, which motivates businesses to exist in the first place, unless it is a business in intensive care.
For most businesses, the goal would be something along the lines of emerging from a given period of business activity, or from a project, having attracted more money than has been spent making it. Or, in other words, having made a profit and then having converted some of it to cash.
Once in the habit of producing cash, those running businesses get a taste for seeing more of it. It is usually at this point that factors limiting business performance conspire against the resulting growth plan—if indeed there is such a plan.
Finding more customers is often the most pressing need for small businesses, and that means shopping in the same market space as other predators, all equally intent on bagging a meal”
A typical stumbling block for a lot of small businesses, is the all round capacity that a single pair of hands can carry. Logically, two pairs of hands, doing the same things equally well, get twice as much done. But the other side of the equation, looking at hands’ cost, does not scale quite as elegantly. A second pair of hands may represent a significant additional fixed cost to a small business. This cost has to be met with results. Taking on new costs in order to grow is not considered lightly and is speculative in its nature. Many take the view that, in the prevailing tough climate, speculative ventures are best avoided.
Finding more customers is often the most pressing need for small businesses, and that means shopping in the same market space as other predators, all equally intent on bagging a meal. It is supposed to be healthy for a business, but ask anyone who actually runs one and most would agree that having a market without significant competition would be an attractive prospect.
Routes to growth
New markets could be closer than you think. Huge opportunities exist for domestic
photo murals
There are as many ways of improving the returns for a business as there are businesses to improve, and probably more ways still of finding new customers. One way, however, that consistently pays dividends to those able to manage it, is diversification. Diversification comes in many flavours, strengths and orientations, yet can be practised to some extent by a business of any size, and at any stage in their development.
One of the biggest attractions of diversifying is that it helps businesses to ‘sweat the assets’”
Unless your grand scheme is to produce the next Serco or Virgin, you do not need a huge business plan, an expensive team or a point-perfect execution. You can embrace a little diversity, take a bit of a risk, put a bit of money in, and point your business off in directions where growth may be a bit easier to find and sustain.
One of the biggest attractions of diversifying is that it helps businesses to ‘sweat the assets’. It is sometimes not immediately apparent to those very close to the business, but many have the means to deliberately diversify without having to find significant further investment. This suggests getting more out of what is already there and defines diversification at a market level. It is practising what you know, but directing the effort at a market you would not usually speak to.
Diversification
Of all the available routes to growth and increased profits, diversification is among
the most attractive and accessible
Here is how you might approach the subject. The first thing you need to consider doing is looking up from the job in hand, and all the deadlines and pressures that come with it, and taking a look at what is around you. What does the field of play look like?
If you are reading SignLink, chances that are you are involved in the signs and graphics industry, and that is a good thing seen through the lens of diversification. Our industry presents some really good and well signposted paths you can tread at little risk, in pursuit of business diversification.
The signs and graphics industry today is, very obviously, a reflection of all the activity that has taken place in the market up to this point. It did not get here by accident. It is the product of a big bang or two and some strong market forces; chief among these is industry convergence, and technology is its driver.
Our industry presents some really good and well signposted paths you can tread at little risk, in pursuit of business diversification”
Quite where or when it happened exactly is available for debate, but at some point in recent history a sign-maker undertook a job that days before could only have been tackled by a photo lab. This happened because the notional sign-maker had installed a printer capable of producing big, colourful images, despite his main needs being the ability to produce signs. A bit of random demand then found him. An accidental market diversification happened. Did he turn it into a specialisation and grow the seed?
The advent of imaging related hardware sent demand, and the means to meet it, scooting off in all directions. Screen-printing, sign-making, wide-format print production and other industries were swept downstream by powerful influences of convergence.
If you look back upstream, you will see the polar opposite of convergence via production, divergence via market. Much of what at one time distinguished between imaging-related industries no longer does. Sign-makers, therefore, can exploit opportunities for diversification, simply by extending the reach of the output they produce and by talking to a different set of customers.
Practical matters
Corporate art represents an accessible avenue to further profit from print that even
modestly equipped sign-makers can explore
As with all complex matters, a worked example is perhaps the best way of illustrating the possibilities. We will take as our example what might pass for a typical sign-maker. He will have at his disposal every asset his business needs to diversify into new markets, even some of the customers.
Think about what a sign-maker actually produces and what he is really capable of producing. The delta is huge. A narrowly focused range of digital output, which is applied to vehicles and signing substrates, marks the boundaries of the space his business targets. Yet, pulling one out of thin air—what about corporate-art?
What is corporate-art? It is what you decide to make it. It is a framed picture or two in a business’s reception hall or in its boardroom at a product level. It is nothing more than a very simple website and perhaps some new business stationery from a marketing standpoint. It is a few questions asked of a customer you have already hooked from a sales point of view. And it is maybe a roll or two of media you may not have bought before and
a few raw materials in terms of production.
The markets that a typically equipped sign-maker could enter through planned diversification may not be immediately obvious, but this only adds to the basic attraction”
You may be capable of taking images of a company’s products, turning those images into abstract representations of themselves—or art as some might choose to call it. If you get to that stage then printing your abstract images and framing them shouldn’t be too difficult; it uses the same skills and hardware as sign-making.
When it comes to a business plan, it is worth considering the ideas of all your staff
Selling the product to an existing customer may be a bit of a challenge, but is the thought of getting work like it on a repeat basis, charging maybe four times the rate you get for signs, attractive? It probably is. That is an elementary example of attainable diversification. Sign-maker to art-broker in three paragraphs and one leap of ambition fuelled faith.
The markets that a typically equipped sign-maker could enter through planned diversification may not be immediately obvious, but this only adds to the basic attraction. Most sign-makers operate inside the business-to-business markets, but making the leap from there to the business-to-consumer arena only requires one of those minor course corrections noted above.
Set up a simple site with a payment gateway and you are effectively printing for cash, rather than extending credit to other businesses. Diversification has many attractions for cash-strapped businesses”
Domestic window manifestation graphics and photo-murals represent two potentially fertile and lucrative markets to explore. Printable wall covering materials, for example Metamark’s MD-TX, can be printed with any design that can be visualised, and then applied to the interior walls of houses. Children’s bedrooms represent an obvious target and were made for the big, bold colours that are possible. Subject matter is readily available from stock libraries and, once the idea is put into someone’s head, it practically designs itself.
Getting the market moving, for murals for example, requires a bit of prospecting. Do one for a neighbour and see how fast ideas spread—about as fast as pictures can propagate through Facebook, and as fast as the audience can find the source. Direct to consumer business bends well to internet sales activity as well. Set up a simple site with a payment gateway and you are effectively printing for cash, rather than extending credit to other businesses. Diversification has many attractions for cash-strapped businesses.
Unless your business has an inventor, or a gifted creative at its helm, it is unlikely you will have anything even vaguely like exclusive control of a market or access to so-called ‘white space’. Yet this should not put you off. If you are in business now, you must know how to deal with competition, or you would not still be standing.
The first sale
CapIt is worth taking a step back from running the day-to-day production of your
business on a regular basis to consider the potential value of new markets
Chief among your diversification challenges is adopting the right mindset. It is specialisation that defines you as a sign-maker. Nothing more than that. You have the skills, the hardware and all the supporting matter you need to diversify. You now need the intent and the capacity to deal, not just out of the box, but out of your market and, perhaps, out of your comfort zone.
You have only to try it. Try selling a framed picture to a customer you are making signs for. Try selling a printed mural to one of the thousands of householders surrounding you. Try getting some etched graphics onto a set of patio doors instead of a restaurant window. Try anything, but do try.
The first sale is to yourself.
