If you are a service business you will eventually hit the crossroads of a tough question; stick to your niche service or expand into other services? Scaling a service based business is difficult enough as it is. As an entrepreneur you will eventually hit a limit as to the amount of business you can handle on your own. Most business owners instinctively want to expand and grow without asking a very important question: are you truly ready to grown your small business? I've seen some service based businesses successfully scale their current service. I have also seen businesses successfully expand into offering other types of services and gain more market share. However, I have seen businesses (and more of them) fail at both growing their current service and/or expanding into other types of services. Before you expand into offering other types of services here are a few things to think about.
Do What You Are Best At
There is a lot of value in focusing on what you are best at rather than doing a few things that you are good at. By focusing on what you do best you will benefit in several ways. First, success will come naturally when you focus on your niche service. You will also have the ability to become an industry expert in one service in the eyes of your business network. Lastly, you will have the opportunity to emerge as a thought leader in your niche service. All of these are good things that will lead to a more successful business and career.
Use Trusted Service Advisors With Care
Some businesses choose to expand into other markets, but they use trusted service advisors to do so. It is very important to use other service advisors with scrutiny. No matter who is providing the service it is your name and reputation that will be judged and affected. If you do use other service providers to help deliver your service you better make sure that the manner in which they deliver services is in line with your expectations and those of your client.
Beware Of Mergers And Acquisitions
Some businesses will merge with or acquire other service businesses in order to gain more market share. However, this strategy can often fail if the business is not careful. Have you ever been dealing with a service business that sent out a notice that they recently merged with another business? More often than not that notice says how much better things are going to be for you as the client right? However, after the merger or acquisition have you ever had your level of service slip? Some mergers and acquisitions are a great thing for businesses and their clients. However, I have also seen many fail and unhappy clients flee to the competition. Just be weary of merging or acquiring a business as a means to grow your own market share.
Follow Up Is More Important Than Ever
If you do choose to expand your service based business into other types of services then customer follow up will become more important than ever. For current customers you will want to make sure that they are still happy with their services after you have expanded. You don't want to do anything to mess with your bread and butter service. Making sure that your current clients are still happy is important. You also need to follow up with customers that are using new services you are now offering. As you grow into offering new services you need to make sure that customers are happy with what you are offering.
Is The Grass Always Greener?
Businesses choose to expand into new services for two simple reasons; to gain more market share and make more money. But they rarely think about the possible negative outcomes of growing. You may grow and expand your business into something you hate. You then may wish to go back to the way things were, which can be easier said than done. You may also over extend your businesses capabilities, which can have negative effects on your main service. If your expansion starts to mess with your bread and butter service you may be heading down a dangerous road.
Service based businesses will often expand into offering other types of services with the hopes of gaining more market share and therefore making more money. However, if you don't expand into other services with a plan you may end up regretting it. The last thing you want to do is expand and have it negatively affect your niche service as this could put your business in jeopardy of failing completely.
