As a small business owner, have you given consideration to expanding your product lines? There are many reasons why small businesses should consider adding either new products or additional lines of business. Additionally, there are both pros and cons of doing this.
Adding new products, services or lines of business is very commonplace with large corporations. Just look at what Apple has done and the portfolio of products they sell today that didn’t exist before. Having a diverse portfolio of products can and will open up opportunities to increase sales and gain market share where none existed before.
On the downside of the equation is the potential risk for cannibalizing your core products. Adding new products should create additional revenue streams without impacting the sales and growth objectives of other products. In a lot of cases, there are unforeseen consequences of adding new products.
Sometimes small businesses add new product lines solely for the sake of generating more revenue. This approach may be a slippery slope as the sales process used to sell them could be completely different, creating inefficiencies in your operations.
Meticulous planning prior to rolling out a new product line is critical to not only assessing the monetary potential, but also the risks and feasibility of the expansion. Expanding your product lines takes a lot of time. Before you try and do so, you certainly want to ensure that your efforts are going to provide you with a good return on investment.