When it comes to securing your business’ future and increasing its profitability, diversifying your business is key. Diversifying essentially means to vary your business’ range of products or field of operation — a strategy that small businesses can learn a thing or two about from IKEA.
Why You Should Have a Side Business
Lessons for Diversifying Your Business Portfolio
IKEA, a multinational furniture retailer headquartered in the Netherlands, recently revealed it is considering opening a chain of standalone restaurants.
The furniture retailer that designs and sells ready-to-assemble furniture, kitchen appliances and home accessories, has always had restaurants in its stores since the 1950’s when it launched. The restaurants serve bargain meals and snacks, a carefully crafted diversification and customer acquisition strategy that helps to lure in customers for more furniture sales.
“We’ve always called the meatballs [sold in restaurants within their stores] ‘the best sofa-seller,’” Gerd Diewald, who oversees IKEA’s food programs in the U.S., told Fast Company.
“It’s hard to do business with hungry customers,” Diewald added. “When you feed them, they stay longer, they can talk” about that wardrobe, sofa or bed and make a decision to buy there and then.
IKEA Food and Restaurant Business
IKEA reportedly serves some 650 million diners a year, across 48 countries around the world. Of these diners, 30 percent visit IKEA just to eat.
Annual food sales for IKEA added up to around $1.8 billion in 2016 and about $1.5 billion in 2013. While these sales figures pale in comparison with IKEA’s main home-goods business’ revenue, which topped $36.5 billion last year, the company welcomes the additional revenue generator.
The retail chain’s executives say they plan to expand IKEA’s food business further and have standalone restaurants dot cities around the world in coming years. Already IKEA has opened temporary standalone restaurants in Paris, London and Oslo.
If you are a small business looking for ways to increase revenue, you might want to follow IKEA’s lead and develop a complementing side business hustle. For a small café, that might entail expanding your offering to include meals or baked foods. For a small restaurant operation with a specialty item like ice cream, it might mean starting to sell your own brand of ice cream retail.
The results of your side hustle and the extra revenue generated can open up new avenues for growth.
IKEA Photo via Shutterstock
Source: Small Business Trends