Looking to spread your wings out? Here are five tips for diversifying...

Looking to spread your wings out? Here are five tips for diversifying your business

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In 2013, my husband Brett and I took the plunge and launched our online-only brand, Redsbaby, the first of its kind in its category. The brand has successfully satisfied the Australian demand for baby products that effectively amalgamate function with style, with the Australian customer at its centre.

In less than four years, Redsbaby has fulfilled over 16,000 customers, claimed 14.5% of total online pram sales (Online Baby Product Sales in Australia, IBISWorld, 2016) and amassed annual revenue of $6 million, as well as attained household name status.

We always dreamt of being our own bosses and spent countless nights dreaming up business ideas. Our light bulb moment came after speaking to numerous friends who bemoaned the lack of choice of prams on the market, complaining that there were none that were both practical and stylish. After looking into other products on the market and deciding that there was indeed a gap, Brett and I decided to find a solution themselves.

With my extensive experience in product management from her previous roles at Sunbeam and Tomtom, it made sense to come up with our own, better design and so they looked into it and decided to give it a go. Not only did we have my intricate knowledge of product design, the importance of tailoring products to individual markets, trademarking, forecasting, how to handle offshore suppliers and production, but I also already had exposure to the baby category and the strict regulations that go with it.

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Having quit our jobs and put our house savings into the business, we had a lot riding on their idea and it is undoubtedly their conservative approach that has made them strong.

After seeing sales of their prams soar, we decided to expand into nursery furniture. A large majority of customers were first time parents so they were also looking for a cot for their baby’s bedroom. Extending our brand into furniture made sense and was a natural progression.

We moved forward with a manufacturer but soon realised that this particular factory wouldn’t be able to deliver on the quality or the volume they required for Australia, so we made the difficult decision to stop production and find a new manufacturer. Having to quickly change suppliers meant turning down $65,0000 worth of orders and dumping a lot of product. Without capital or investors, it was a painful exercise and it could have spelt the end of Redsbaby.

Fortunately, we had kept the business purse strings very tight at the beginning. These valuable business lessons only made the company stronger and today the company sells a range of pram designs and furniture.

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Here we share my tips on diversifying your business.

1. Implement a risk reduction strategy

This is a no brainer, but one that many small businesses overlook. Take the time to put measures in place to reduce the severity of losses. Risks may be financial, safety-related or operational and an effective plan needs to be in place to reduce these risks and ensure the safety of your business and staff.

2. Stage your expansion into other products

Redsbaby focused solely on prams for three years before even thinking about including nursery furniture into their portfolio. Doing everything at once is a great way to fail. Instead, take time to slowly introduce new products into your business, when the time is right.

3. Take time to build your brand

Brett and Meagan took the time necessary to get the core of their business right and build the brand equity before expanding. It’s so important to decide on your company values and objectives from the off-set and to stick to them as you expand.

4. Follow a natural progression

Nursery furniture was a natural progression for Redsbaby. As they saw it, a first time parent is buying everything at the beginning and so they took the opportunity to offer them more than just a pram. Ensure the next product makes sense for your brand and is targeted at the same person.

5. Recognise when you have to pull back and don’t risk your brand values simply to grow

The Redelmans took the financially painful decision to change manufacturers at the last minute, despite missing out on a lot of orders, money and losing product. The decision made sense, as they knew they wouldn’t be able to deliver on orders, a move that would have put a bad taste in customers’ mouths. Acknowledge when you need to take a hit in order to keep your brand’s integrity.

Meagan Redelman is co-founder of Redsbaby, the business she started with her husband Brett in 2013.

meagan_redelman_redsbaby_cofounder

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