I have extracted the following comments from an article written in 2002 by Steve Toburen and published in the February 2002 ICS Trade Journal as well as a later one . . .

I have found these to be some of the most insightful articles written for anyone who is considering whether or not to add a diversification to their business in our industry!

Steve goes provides a "checklist" of recommendations as follows:

Here's a "diversification check list" with a few questions to ask yourself before you leap:

Carpets cleaners have a huge number of diversifications they can expand into. The challenge is finding those that return the most net profit/least problems while not distracting you from your "core" business

1) Will the new service complement my existing business, both logistically and in my customer's mind? Carpet deodorization or upholstery cleaning are synergistic add-on services; Your proposed diversification should complement services you have already developed

2) We're all looking for "one stop" shopping.
Your expansion options should fall within what the average customer mentally expects. If you can save money/make life easier for them "while you are there," diversification plans may work.

3) Is the diversification part of your future life goals?
Looking back, I'm amazed at how I blundered to business success. At different points I offered chimney sweeping, computer sales and repair, Indian jewelry, auctioneering, home remodeling, residential painting, furniture building, entrance mat rentals and sales and janitorial services along with the "normal" arsenal of carpet cleaning services.

(We even thought about opening a restaurant. One disaster I successfully avoided.) There is no doubt I would have been better off (emotionally and financially) by avoiding some of these unwise "diversification distractions".

4) Can your employees "deal with it?"
Over the years I've shut down many diversifications (some at great cost) because of my employees. As a bored entrepreneur, I loved switching from my carpet-cleaning hat to my chimney sweeping "top hat" before putting on my painting contractor hat.

On the other hand, my workers loved their comfortable routine and hated constant change. Quality and morale dropped sharply when I moved employees from one trade to another. (This was true even if they were skilled in both areas!)

(If a diversification is not related to your core business, ask yourself if you will be able to assign full time employees to it because you will probably eventually need to do so).

5) Can YOU "deal with it?"
If you are struggling to stay on top, don't add to your challenges by diversifying. If your business style is "management by crisis," the last thing you need is another set of problems. Get your ducks in a row first, and then expand your services.

6) Can you implement the proper financial controls?
Carpet cleaners often fall into the old trap of "losing money on every job but making it up in volume."

This doesn't occur because the market will not pay more, but because the carpet cleaner fails to even remotely understand the cost of taking on a given job. This is a common problem in business and much more serious when you diversify your company into other areas.

7) Can you give a "yes" to each of these questions?
Then, diversify by offering your existing customers more services. After all, your core carpet cleaning business should be already covering your basic business overhead, allowing you to charge premium pricing for your proposed diversification, skimming the cream and making a "whole lot" of money in the process.

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More excerpts from Steve Toburen as published in the March 2002 ICS Trade Journal. . .
Business Diversification: Trap or Opportunity?
by Steve Toburen
March 10, 2002

In this later article Steve Toburen writes more about diversification:

A Few Words Of Caution.
Even the best systems and tools will lie idle if you don't take advantage of them. But the potential dangers of any ill-advised diversification run deeper than just wasting money on unused equipment.

1) Managerial dilution
The majority of carpet cleaners do not manage their existing company correctly now. When they diversify, their current business often suffers greatly.

The result? A business that was at least adequate limps and the new diversification suffers from lack of knowledge, experience and performs even worse. Not a nice place to be.

2) Marketing dilution
One reason companies fail is the lack of marketing, specifically in face to face selling. As my friend Chuck Violand says, "The hardest door to make it through is your own."

Once again, when you add another "diversification opportunity" to your business repertoire, your current company marketing is likely to suffer. Another bad place to be.

3) Change is stressful
Unless you are adding new workers to operate your new service, your existing employees -- most of whom are "creatures of habit" -- will have to learn new tasks.

At the very least, they will passively resist changes in their comfortable routine. As an entrepreneur, you thrive on change. Employees largely hate it.

4) Confused customers
Your marketing has hopefully stressed one "defining difference" no one else can match. If you try to be "all things to everyone," your image and position in your customers' minds will be affected.

5) Lack of focus
Most carpet cleaners never come close to dominating their existing service area and specialty. Depending on market size, most are better served focusing on being the best in one specialized service.

The key reason we diversify? Boredom, plain and simple.

After a few years of pushing the wand, many carpet cleaners lose interest in the actual work and start looking for new interests.

But like a marriage of many years, it may be better to look at what you have instead of searching for something new. It could be your "love affair" with carpet cleaning needs to be rekindled.

On the other hand, there are powerful reasons to diversify.

Just make sure that your business expansion efforts are based on sound economic principles instead of always searching for the latest and greatest.

The preceding has been extracted from two articles authored by Steve Toburen, and published the ICS Trade Journal February & March, 2002

The full articles can be found at:
February 2002
March 2002