Wealth Building through Diversification of Business Income

Concentration of effort and intelligence towards a singular goal or task is the best way to extract the desired results from it. In that sense, diversifying your interests across multiple businesses or tasks goes against the grain of excellence in one field.

In the world of business however, achieving this form of diversification is made somewhat easier by the possibility of allowing yourself to step out of the realm of everyday operation of the business, and to instead expand your sphere of influence by leveraging your existing knowledge into new areas.

All wealth creation strategies must be viewed as small independent business units generating income for you, and thus follow the same principles.

If you are an expert in performing genetic analysis in a laboratory, you can use that knowledge for consultation services, writing books and blogs, as a national speaker or as a spokesperson for the local government. Once you become, say an expert national speaker on that subject, you can then develop an additional interest in a new area and use your national speaker status to give more talks and expand your business on that front.

In other words, taking careful, important steps away from your established business and leveraging your existing knowledge for use in new areas will help grow your income streams, and diversify your overall business income.

This diversification will pay dividends in terms of providing you with customers from one to the other business as well. Folks you meet in your speaking assignments are potential candidates for your mailing list for books and blogs; your books will generate clients for your consultation services and so on. The main thing to look out for is to not step too far out of your line of expertise at any given time. Over a period of time though, you will be an expert in multiple areas - though known centrally for deep expertise in one or two areas.

This is not so different from what is recommended for becoming a technical leader at a multi-national corporation, see the E-Book on becoming a highly compensated technical executive available right here.

One of the main advantages of diversification that we have found is that it tends to sharpen your focus on your existing businesses, as you further clearly define what the central purpose, theme and future of each of your business units are. Furthermore, you tend to drop the unprofitable aspects of it, and maintain a lean-mean machine - avoiding any bloat.

It also forces you to think in the franchise mode, but even more importantly, it reveals the central importance of developing transferable skills - skills in marketing, sales, management and so forth. The technical details of every business unit are likely to be different - but many of the operational aspects are the same and diversification forces you to master those skills.

Having said that, there are times when diversification is not the answer - and that is when your endeavor holds such large potential that you are far better off being centrally focussed on that one area. This is not likely to be true if you are an already busy professional with limited time available for executing wealth creation strategies. In that situation, building a diversified empire of income generating assets is the path that will lead you most rapidly towards total financial freedom and wealth.