Is Your New Business Helping or Hurting?

Finding new opportunities for your business is important, even if it means leaving your comfort zone to explore new disciplines and categories.

But in order to do so, you need to approach new ventures with intelligence and forethought. After all, you want a new direction to add to your bottom line, not take away from it.

When you are looking to add to your company's roster, you need to consider three points to determine if it will create growth or flush your whole company down the drain.

What's the Market for It?

The acid test for determining a market is whether you can make money doing it.

You should:

• Carefully evaluate the opportunity in your market
• Talk to vendor reps, other dealers, and even target customers about whether it's something that makes sense
• Go back to Small Business Principles 101 and figure out your Strengths, Weaknesses, Opportunities and Threats.

With some homework, you'll be able to determine if an idea is right for you.

Can you do it with Minimal Growing Pain?

There's not a lot of point in growing a new category if you have to cut back radically on one of your other key expenditures.

Adding a category or discipline will require that you shell out for new equipment, inventory, and training. But be rational and don't bet the farm all on one change.

You will have to spend money to make money, but by the same token, just throwing money at a problem isn't a guaranteed fix.

Is it Really Going to Make a Difference?

Change can be good, but change for the sake of change alone isn't really a solution.

You've got to be honest with yourself about whether your idea has got growth potential, or if you're just slapping on another business as if it were a handful of Play-Doh.

This past year, an Edmonton, AB-based custom install company with a nearly ten-year track record found themselves in pickle when their sales funnel virtually dried up and they were living on their progress payments alone.

Ouch!

They decided to branch out, expand their retail space and add 12v Car Audio to their mix. Not only did these changes not do anything to offset the decline in their core business, they didn't do anything positive at all.

They've now closed up shop.

While their passing has created opportunities for other dealers to pick up their clients and half-finished jobs, they could have done things differently.

There's Help, But It's Still Up to You

As a result of all the grim economic stories making the rounds, there's been a greater focus than ever in the CE trade media on how to improve your business and find opportunity in adversity.

Organizations like CEDIA have helped grow the message, with programs like their Survival Of The Fittest webinars. Having resources like this at your disposal is a great thing.

It helps to have sound advice coming from people in the industry who are in your corner, but the onus is still on you to make a go of it with your business.

It may not be easy, but with some forethought and creativity, I hope that you can steer your business in the right direction.

Lee Distad is a freelance CEDIA Certified Professional Designer who offers design and process consultation to firms in the Custom Installation industry, as well as copy writing and other professional writing services. Lee’s business and industry blog can be read at http://www.leedistad.com