Is your business booming? Don't mess it up. Why you need to diversify.

When you’ve built a business that’s found its groove, it’s natural to start looking to expand, diversify, or strengthen your base by segmentation. But no opportunity is without risk, so your next move needs careful consideration or it could cost time, capital, and most importantly, the opportunity cost of more valuable initiatives, writes Ben Cohn managing director of TAXIBOX.

In the beginning

I co-founded TAXIBOX with a good friend, Jeremy Rosen, back in 2010 and in just over a decade, we have built a vibrant operation that dominates our segment of the storage market with a clear differentiator of convenience (the storage unit comes to you!), and a very unashamedly bright-yellow brand that packs a punch, but also some less obvious investments in technology, innovation and marketing that makes our business run smoothly and with better scalability.

We started with a very clear differentiator – in the context of traditional self-storage companies that put all the work of getting storage organised on the customer, TAXIBOX made the process dramatically more efficient and convenient by delivering the storage unit to the customer and collecting it for safe storage in our indoor facilities.

Don’t miss the wakeup call

What we didn’t consider was that there are many other external factors that can influence growth – one of which (that has a particularly strong impact) is the real estate market, and its natural cycles. Many customers use TAXIBOX as part of moving, renovating or decluttering, but in the first half of 2018, property sale volumes across metropolitan cities were approximately 25-50% lower than the previous few years. This had a material impact on our performance and growth plans, and was a wake-up call that we needed to diversify TAXIBOX’s exposure into other markets.

At the same time, we had been looking at ways to broaden our appeal and brand, be even more useful to our existing customers, and tap into related markets that we felt were underserviced or lacking in sophistication.

We started by examining similar storage-related industries that were not as exposed to property market fluctuations, and settled on closely linked cousins to our mobile storage business – on-site storage and cool-room storage. Both ticked the boxes of putting us in front of new markets, while leveraging existing competencies in providing storage innovation and convenience to our customers.

Why tech matters

It was our intention from the outset to utilise technology to create a crucial point of difference for our products. In what has generally been a low-tech industry, we introduced innovations such as automated online booking, Bluetooth locks on units allowing remote access, live driver tracking and online customer portals. As well as being customer-friendly, embedding this cutting-edge technology has the added benefit of making our business harder to compete against … and customers love it!

Most successful business owners are entrepreneurs, the personality type who hatch big ideas in most unusual circumstances (think long showers). We certainly have no shortage of creative ideas in TAXIBOX, but the art is in identifying what’s going to ‘move-the-needle’ and is aligned with the strategy of the business. This is very hard to get right as risks are required to grow, but they need to make sense. It’s also particularly challenging to resist ideas, as many of us are creative and seem to get bored easily, so tread carefully! The best chance of successfully diversifying usually lies in what you’re good at, and utilising your team’s existing strengths.

Make yourself known

Another important learning in our expansion has been the power of building a strong and visible brand. If you haven’t seen one in Sydney, Melbourne or Brisbane, dare we say you’d be amongst the minority. We certainly didn’t pay enough attention to the power of the brand when we first established TAXIBOX, but on reflection, it’s had a huge impact on our success as people trust and relate to the brand. It’s also allowed us to enter new markets with trust and an exceptional reputation which makes growth in these markets much easier.

It has taken just over a decade to build TAXIBOX into a market leader and we’ve learned a hell of a lot about many things – ourselves, our customers and dealing with people. Balancing entrepreneurial enthusiasm with an understanding of what we do well and lots of blood, sweat and tears, we plan to continue to strengthen our market position and look for opportunities to keep growing TAXIBOX. We’ve got a lot of stuff still in store.

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