By Mr Retail
A big part of future proofing your business is diversifying your business. In the past, we have talked about diversifying just to boost revenue. Now let’s look at it from the point of preparing for the future, which also means considering two points–legislation and trends.
Legislation is quite literally a hated word for most small businesses as it brings to mind things like new taxes or restrictions on our businesses. To clarify, legislation can be federal, state, county, or city/town related. And all of these can affect you in good or bad ways. Let’s explore a positive and a negative scenario that could affect your business.
- Your state passes new legislation related to ignition interlock systems that has the capability to net you hundreds of new installs per month. So, what started out as a small add-on revenue stream could become quite major for you. It may mean adding new employees, adjusting store hours, enlarging the area you allow for this service, etc. But if you don’t know about this new opportunity and do nothing, you might lose out.
- In another scenario, your store offers window tinting in a state that doesn’t enforce darkness levels at all. But then a high-profile case goes through the court system and people are told that dark window tint caused an accident. Suddenly, all state police departments are told to enforce the darkness limit law. In a restrictive state, all of a sudden you can’t put film darker than 70 percent on the front windows. Your revenue is going to plummet.
In either scenario, you want to be proactive in responding, not reactive, as your income may see a dramatic change. And that means diversifying.
The second thing to note is trends. If you are at least in your mid-30’s, you remember the trend where people wanted to put video screens ALL over their vehicles. Some of them wanted 10 to 20 screens. Overnight, new businesses were born to satisfy the craving. Now, let’s assume these businesses never got into other categories. They would all be long gone as that fad peaked really high and then died.
What does all of this mean to you? It means you want to keep a close eye on the buying trends in your store and the products that clients are requesting. If your staff waits a whole year to bring it up to you, there is surely going to be dead inventory or lost opportunities.
The key solution for future proofing your business is simply diversification. I refer you to another column here. Some popular categories for diversification are paint protection film, ceramic paint coatings, off-road lighting, truck accessories, WeatherTech products, and LED replacement bulbs. And let’s not forget selling add-on CarPlay and Android Auto modules.
As we move another month out of the pandemic, the new normal is upon us. And chances are, it looks different than 2019. For this reason, you want to keep a closer eye on the things above as you can just look at a six month sales report and plan ahead.
I wish you well as you work to future proof your business.
About Mr Retail
Mr Retail offers opinions and information on car audio retailing for CEoutlook. He wishes to remain anonymous. He has owned a retail store in this country for over 20 years now. Mr Retail loves what he does and loves the 12 volt industry and is happy to share his hard won expertise.