Diversification Gone Wrong
I was in my hometown yesterday visiting family and I happen to be reading one of those small daily's small cities have. I came across the "newly expanded" business of an old aquantance. She is a hair dresser with amazing talent and great ideas for her business. Her artistic talent with hair extends easily to interior design. This has brought her a long way as her salon was absolutely stunning last time I was there. Yet it was strangely quiet, even when other salons were booming... so what was the problem? Sadly, I think it attributes to her personality... she was an incredibly negative person (at least when I knew her). When working on your hair, normal chit-chat would turn to her putting down others, even friends and family of the person in her chair. It was disconcerting to say the least and I know more than one has moved to another hairdresser for that reason, though reluctantly because of her talent. So in order to make money she has chosen to diversify rather than fix what is wrong, improving herself.

Diversification isn't a bad thing, any strong business should always be looking for ways to improve in order to stay strong and current. I have seen this somewhat in my own field as well, doulas and educators diversifying to increase their income. Diversification has also answered the needs of a business in turning the focus from a primary service towards the deversified service or product. For instance, a business primarily started to provide maternity clothing many have evolved very successfully into an infant clothing company or into providing specialized breastfeeding services and products. This isn't an easy shift however and needs to be done very carefully and with lots of forward vision and planning.

My own Mother Care has very successfully diversified both with services (providing childbirth education and postpartum support to round out doula services) and our international catalogue specifically for birth professionals was the answer to many who couldn't find the products we made or carried in Canada. These were all in our primary vision and initial business plan, however we streamlined when we answered the need for quality training workshops in Western Canada and sold the catalogue to better focus on this.

All businesses should start up with a strong business plan and have the market research showing the need of that business's product or service in the area. Without either, or preferrably both, the business owners are unable to address the needs of their potential customers because they don't know how to reach those customers. Sadly, most businesses choose to diversify because of lack of income because of this, which only strains the business financially and doesn't address the initial problem.

This is especially so when you see a business diversifying into products or services far removed from a business's initial business plan. When you see this, you know that either the need isn't there or that business owner is not addressing key internal issues. This type of diversification will only confuse customers and take away from the entepreneur's vision and focus... which is never good. Take the salon I mentioned above. My aquantance above has diversified into "adult" products which are a loong stretch from the cutting edge hair salon it was. Not exactly what a high-end salon would have in their initial business plan. So it can be seen in doula businesses who have diversified into... say children's used clothing or nanny services. Either the planning wasn't right or there is a problem within.. like the business owner is not addressing her clients needs. Choose wisely when purchasing services, especially when they are as important as self-esteem (hairdressing) or birthing (doula services).