Diversifying Your Revenue Stream
Diversifying Your Revenue Stream
Change isn’t always easy but sometimes necessary. We are seeing a trend of change among many clients we work with at Cerius. Most of that change involves diversification. This diversification is in a number of forms from client base to products and services. Leadership is looking to lower risk in the long term by taking some risks now.
With a business that is increasing its revenues year over year and has good cash flow, it can be difficult to look ahead and think your revenue sources may be very different three to five years from now. Just because that is how you have made money in the past doesn’t mean it is sustainable. We are seeing the drive for diversification in a variety of industries and types of companies. Here are some great examples of companies Cerius has worked with and what they are doing to ensure they are creating and leading the market rather than just surviving in it.
There is no question the healthcare industry is changing. One of the best applications we have seen that combines product management with innovation is a large healthcare services company that took on Innovation as an initiative and is turning it into a business practice and line of services. Rather than just adopting some of the innovative trends and technologies available, they are investing in the companies that are developing them and applying it to their industry and services. The company was able to stay focused on their normal business operations by bringing in an innovation executive with a variety of industry vertical experience that could be applied. With the focus being maintained by an external resource, the internal team was not distracted but rather energized with the exciting direction in which the company was going.
Non-Profit for the 21st Century
About the last place you would think of an organization taking initiative and expanding their services away from what has been done for the past few decades is a non-profit. It is easy to become myopic when you are operating a company on a day to day basis. With this in mind, a nationwide non-profit brought in an interim executive from outside the company and outside the industry. The executive was able to quickly see how to leverage the non-profit’s core competency of receiving and reselling their donated merchandise within a single category to other categories with relatable characteristics. Within two months, the expansion had already begun along with the organizations first app to make it quicker and easier for donations to be pledged and processed.
Family Owned Business
After 30+ years in business, a family owned business decided it wanted to be in business for another 30 years and in order to do so, it would need to change its service and product offering. Over the decades, the company had built strong relationships with their clients as well as throughout the industry both with competitors and complimentary providers. One of the biggest challenges their clients have is managing the range of providers for any given project. With a strong expertise in understanding the client’s end need, the company decided to expand beyond their single product and become the single point of contact for the client across all service and product offerings. This will solve the client’s problem of coordination issues and provide better coordination and clarity for the suppliers, not to mention an expanded revenue stream for the company.
The one thing all companies had in common is not relying solely on their internal team. To think outside of the box they went outside of their company and found expertise to minimize the risks they were taking. Here’s some insights from Cerius Experts who work with companies looking to leverage outside expertise and resource to diversify their revenue stream.
- For situations that may not be consistent with the norm of your industry or business, an innovative interim executive can be instrumental in identifying the target, the path and aligning your organization with the direction.
- Start off with a very specific strategic product marketing executive. Someone who knows how to productize, because optimally you’re not just looking at the revenue streams within the industry, it’s ‘what is the product, how do I describe the product and is it marketable within the marketplace? Supplemental marketing resources can be used to create the messaging both externally and internally. This is one of the biggest failures we see. The messaging can be the difference between having an okay product but everyone understands it and buys it vs. the best product but the market is too confused in order to make a purchase decision.
Whether you are looking to increase your revenues, pull ahead of your competition or stave off obsolescence; there’s a number of options for getting there.