SMEs are the lifeblood of the South African economy. According to Mckinsey, SMEs represent around 98% of all businesses and employ around 50 to 60% of the country’s workforce. But despite representing the majority of the businesses activity, SMEs are feeling the pinch of the COVID-19 pandemic the most. From travel restrictions, to inventory issues related to travel restrictions and less foot traffic, SMEs have had to adapt to the changing face of commerce in the country.
But adapting can be quite a task when faced with a big shift in the way business and consumers operate. With the significant increase in e-commerce, how do you as a small business change to meet these facing needs, and do so quickly?
For many the answer is diversification, for survival, but also to future proof for stability and growth. What is business diversification? It’s a strategy used to promote growth by either entering into a new market or offering a more diverse range of products or services.
But how does one diversify? We’ll get you started with these top business diversification tips:
Offer new products or services
Diversifying your products or services, doesn’t mean blindly creating a completely different offering, but branching out to something connected to or that relates to what you currently have and your audience. As consumer needs change with our fluctuating waves and regulations, try as best you can to match their needs by enhancing what you do or adding something relevant.
If you’re a local clothing designer, have you jumped on the mask-making trend? Perhaps you’re a local butcher and you could look into offering all the products that customers need to get the perfect braai or Sunday roast together. Or perhaps with the rise in contactless shopping, you could start offering a small delivery service. The change need not be dramatic, but one that opens your business to potentially more sales and even more customers as they discover your new range.
Target a new audience
Just because you’ve spent the last few years targeting one audience, doesn’t mean you can’t open your business up to a potentially new demographic. What this new audience looks like is entirely up to you, but consider the ways in which your current offering might be broadened, or even a new offering created to meet the needs of a new demographic.
Explore ways in which you can open your business up to more people. Do you sell skincare products for teens or young adults? Think about the ways you could move into a space where you could offer products to mid-life or even elderly consumers.
Freshen up your brand
Have you had the same logo and marketing creative for a long time? So long you don’t even remember when they were designed? A refresh, no matter how small, can be the difference between catching an customer’s eye, and not.
Take a look at how more on-trend colours could be incorporated, a modern take on your logo design, or even new packaging that will reignite your audience’s attention, and hopefully the attention of new customers as they browse on or off line.
Get your business online
In an age where shopping online and contactless payments are king, your business is missing out if you’re not online. E-commerce has grown significantly in South Africa over the last two years, and it’s one of the simplest ways to diversify and showcase your products to a larger audience.
First consider what you need from a website builder, do you need a very simple website that just showcases your products and points consumers to your stockists or physical store? Or do you want to become an e-commerce player and sell your products via your website? Fortunately website owners no longer need extensive coding knowledge to create their business website, and DIY is a reality.
How exactly do you get the whole process going? There are three basics to getting your business online:
- Choose and secure your domain name
- Get web hosting to get your website live and online 24/7
- Create your website
While consumer habits are changing as the pandemic presents varying challenges, diversification is a way to adapt. Consider how these tips can help your business diversify and manage change in a fast-changing environment.