Diversifying in Business

By on March 28, 2013
A successful man with multiple business

A business magnate(tycoon,baron) is an entrepreneur who has achieved wealth and prominence from a particular industry (or industries). This is achieved by simply diversification. To diversify in business is establishing different businesses in different field with the aim of being successful in all.

However it is advisable to diversify in business when one is already successful in a particular niche. After an outstanding Success in that field, exploration of other business ideas and projects can be put into actions. The major risk of diversification is low productivity which is a factor that mostly affects small scale business people.

Advantages of Diversifying in business
1. Multiple Source of Income : Doing lots of business at the same time increases our sources of income. Steady and regular income from other business will make us to be more financially successful.
2. It makes your career interesting : Often times in business, doing the same thing over and over again causes boredom which eventually results to lack of motivation. The idea of having your hands in different things can enrich your mental health with a good social life.
3. Low risks: If you have all your eggs in one basket i.e. if you spend all your time, energy and resource on a particular business, The major risk is failure. Remember that sometimes there are uncontrollable external factors that can limit growth or destroy a business. A business man with other projects can easily divert is energy to the others.

With all this great advantages, diversification in business is a also a double-edged sword. If you are not confident of our labor force without good administrative plans, please do not diversify. It pays better to manage one particular business well than to established multiple business companies with bad management. It will be just a waste of financial resources, energy and time. Think before you leap.
Good luck !

 

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