Diversification is Key - So why have i put all my eggs in one basket?

[Kperryman]

Hi Guys, complete newby here! So i currently run a successful mortgage business in the UK, after having spent 10 years working for large high street banks i though F you and stuck it to the man to create my own version, but completely transparent, always for the client, and everything the banks aren't! Let's put it this way! During the credit crunch, if someone on a night out asked what i do, it would have been far less offensive to say i was a SEX OFFENDER, thank saying that i worked for Lloyds bank and the like!

Anyway i digress, using the anti bank strategy, we have built an incredibly reputable business, always looking to better the client journey! From internal service, to eventually getting fed up of solicitors and creating our very own conveyancing firm to streamline the client journey and also ensure more control of the process.

However... it suddenly dawned on me!? All of my business's are entirely focused on the housing industry! This was more caused by natural progression and ambition to always imrprove. But what if we hit a crash? What if theres a big shake up in the housing market (UK)? So like any great investment portfolio, id like to DIVERSIFY.

So i guess my question is what would you recommend? Is there any new niches? Is it best to stick to what you know? Do we use the skills that we have in our current environment to build a business in a different sector? Or do we simply just make our business recession proof? Thank you so much in advance!

 

[Mark T Jones]

In many cases diversification = dilution, unless there are clear synergies

Personally I'd focus on making your business recession- resistant

As a finance broker I'm actually looking forward to the recession - revenues will take a hit, but I will survive whilst all the flash Harrys in fancy offices, and the chancers who don't know what they are doing will fail.

 

[Gettingthereslowly]

Its tricky.

Every time I've looked at diversification, it would naturally require capital and more importantly my time.

I found that I could spend the time on the core business/make more profit; than trying to diversify.
I know lots of small business owners locally who effectively 'own' their own job, but there is not a lot of 'spare' profit left at the end of the year to really grow their business/increase the value of the business.

I pinch myself almost daily and am thankful that I have carved out a niche, make healthy profits, will have something to show for a lifetimes work when its time to retire.

I know my luck will run out. I really need to diversify, but all the alternatives are not very attractive.........yet.

 

[fisicx]

I’ve gone even more niche. It’s earning me more money than when I was targeting a wider audience.

 

[SillyBill]

Make less in recessions and more in good times. The key is ensuring the good time wealth is not squandered. If you have little cash in the bank after a few good years you ought to be concerned about downturns. Like many businesses we've ridden through some awful recessions and come out the other end stronger, it doesn't concern me as much as it used to. Our business is heavily linked to construction, knowing it is cyclical is the key. Diversification into sectors we know less about? Not really required for us.