Diversification and its role in entrepreneurial success

The opinions expressed by entrepreneurs contributors are their own.

If you're a serial entrepreneur, you've no doubt been here before: you're selling one thing. Maybe he grows oranges and sells them to an orange juice processor. Maybe you own an eBike franchise and rent eBikes. Or maybe you sell legal newsletters. You are very good at selling these products and services, leading to what many would call entrepreneurial success. Allow me to share an experience I had during the pandemic and how it protected me from potentially disastrous consequences.

Before the pandemic, in the winter of 2019-2020, I was pursuing two interesting activities. The first was the concept of luxury group homes or the idea that it would be easier to admit someone accustomed to a certain lifestyle to a luxury group home rather than a traditional group home. The shift from living in their own home to placement in a single room in a traditional group home could change their lives and hasten their demise. Combine the concept with the idea that there was a plethora of luxury homes in the Phoenix area, where I had significant real estate and construction connections, and the dice was cast. By February 2020, I had purchased several luxury homes and was in the process of upgrading them. Then the pandemic hit and group homes paid the price. I had inventory left over that I needed to make mortgage payments on, while maintaining their upkeep.

The second focused on the concept of cannabis churches in . Legal precedent in that state had established that cannabis could be considered a sacrament, much like wine is considered a sacrament in the Catholic Church. So I bought a cannabis church in the winter of 2020. Parishioners would visit the church, listen, and participate in a sermon while partaking of the sacrament. Then the pandemic hit and restrictions were imposed on gatherings in California. We briefly explored delivering the sacrament to parishioners' homes, but local law enforcement frowned on the concept. Timing is everything. Today in the South, cannabis users can literally order cannabis delivery via WhatsApp, and it will be delivered to their doorstep, not as a sacrament, but as a recreational drug.

Anyway, two business ideas were destroyed and I was left with a significant financial liability. Fortunately, I embraced diversification. My business, Burns Funding, which provides alternative funding resources to existing and potential resources, was thriving. I was able to absorb the financial blows and start other businesses. So how do you embrace diversification as an entrepreneur? Here are three very simple ways:

Related: Diversify Your Income: Protect Your Finances With These Strategies

Using the example I gave above of owning orange groves, consider making your workplace a destination that sells other people's products. There's an operation near the small town of Arcadia, Florida called Joshua Citrus. Since its inception 33 years ago with a storefront and grove stand right in the middle of the old grove and family farm, the family/entrepreneurs have expanded their storefront to sell the products of others businesses, such as jams, jellies and honey. This helps protect their income stream should a frost affect their harvest.

Perhaps you own or are considering buying an e-bike franchise? Owning and operating one of these can be very profitable. The only field flag I can foresee would be oversaturation. E-bike franchises are popping up left and right, meaning the entrepreneur could see their market share shrink. Consumers are also buying e-bikes, especially in retirement markets like Florida, Arizona and California. You can take advantage of this trend and diversify your sources of income by repairing electric bicycles.

Here's another example: Decades ago, I started a moped rental business in the North East. I was among the first to do so. As more entrepreneurs entered the space, I realized there was something missing in the industry – for these budding operators. I worked with auto insurance...