The owner of a multifaceted group of companies has spoken of his experience that diversifying a business’ revenue stream is not all positive, and potential losses need to be weighed up beforehand.
Nick Mastro of Adore Estate Coffee and the Coffee Galleria began his business about 20 years ago importing coffee to Australia before setting up his own manufacturing branch to roast coffee locally to Australian tastes.
Yet it was his recent move into retail with the launch of The Killer Coffee Co and the new revenue opportunities this brought that resulted to some unwelcome side effects.
“You just have to be prepared. You need to plan. You need to know the risks and work out the risk-to-benefit ratio,” he told My Business.
“We worked out that even if through the change we would lose a few customers – we worked out that we might lose 10 per cent – we’d still be a lot better off and also it gave us the flexibility to move on.”
However, Nick admitted that despite his calculations, his business wound up not losing any customers – but that did not negate the value of evaluating the worst case scenario.
Hear more insights on business transformation and revenue diversification in the My Business Podcast.