Deworsification

We all consider diversifying; if you run bushwalking trips you may consider adding rock climbing or canyoning to your company's range of products. Is it a good idea? lets go back to our shop in a mall analogy; will your shop be successful if half of the front window is icecream and the other half bicycles? Possibly not, but two shops; one icecream parlour and one cycle shop can co-exist well in the one shopping mall. However, having two shops means you have two rents, two inventories and two lots of staff.

You have probably already prepared an arguement in your head; "most of my staff have a range of skill sets and I simply need to direct them to where the need is and most outdoor businesses have little if any shop front".

Let me agree and disagree. I have worked with examples of outdoor adventure companies where a solid focus on their public profile has paid large dividends over their opposition. Buyers look for expertise. if your public profile (website, brochures, shop front, car signage) suggest a "we do anything approach", then the local specialist will outstrip you 10-1.

It is possible to have a diversified public profile, but to be successful it needs to be well managed. You also need to keep in mind that though YOU know that most outdoor specialists have 2-3 activities in which they are qualified, those outside the industry don't. You may be qualified in rock climbing and sea-kayaking, but to your customers it can seem like their surgeon is also a pastry chef.

Do I or don't I diversify?
- every product needs focus to be successful; do you have the time and resources to focus on a varying portfolio
- would the same time put into developing a small specific range of products give a better return
- are you developing other products to maintain cashflow with new entrants into the industry.
The final point is worth consideration. It is quite common for people to come in and set up businesses in opposition to existing businesses. It can be done through careful research where the newcomer has analysed the market, identified a need and has specifically set up to capture that need. It may be that the newcomer has seen a successful business and just comes in blindly thinking that "if one can be prosperous, so can two". It has also been done by people who do no research at all and come in, set up a business and suddenly realise they are the third mountain biking company in the area.
If your opposition are intelligent, the two of you can co-exist very well. Focus on key (but different) areas and create a centre for the activity. If your opposition are either of the other two, they will eat into your customer base no matter how badly they operate.
Depending on your resources, the size of the market and the maturity of the market, this may be a point where a new diverse product gives you the cash flow to weather the storm.

It is a sad fact of the industry that many people enter the outdoor adventure industry for an "easy" lifestyle. They don't understand the business environment and end up spending most of their time doing other jobs to make enough money to run their business. The top performers are very focussed in product and market.

So do I diworsify? yes and no;
Know your market; there is no use buying 20 kayaks to use them 6 times a year. But if they can be a business centre of your business, then consider doing it.
Keep your shop front clean, have clear messages, have specific products (don't just offer to sell anything to anyone).
Don't compete for the sake of competing; I have seen companies say they offer things that they can't, simply so they look as big as their opposition. The classic is always training; every organisation wants to be a trainer. If you are a qualified trainer in a properly set up training organisation, great. If not you will soon look incompetent as your students reach your level of teaching or skill. Compete by point of difference, not similarity.
Diversify because you see a market with a need that you can successfully service