Top 40 Business Tips #35: Stick to Your Knitting


Doing something you know, love and understand will always increase your chances of success in business. Professor Paul Steffens from Queensland University of Technology has been studying 1,400 new and young firms in Australia. Starting in an industry you know well is crucial to success — not only because you understand that industry, but also because you probably have customer contacts you can call on in the early days.

Megan Duckett is an example of an Aussie entrepreneur who has stuck to her knitting, well, sewing actually. She enjoyed sewing so much that she now runs a drapery business to the stars, designing stage show sets for the likes of Sting and Madonna.

But if you want your company to grow at some point you will want to diversify. This is a dangerous time because you could be venturing into areas you don’t understand. There’s also the risk of damaging your initial brand if your new venture is unsuccessful, or isn’t understood as relevant by the consumer.

Stephen Downes from RMIT University joined me to talk about brand extensions soon after Kraft launched a new version of the Aussie icon Vegemite. Apart from a bad brand name (remember iSnack 2.0?) the concept itself was closely aligned to their initial offering. There have been some bad examples of brand extensions over the years though — some are featured in the podcast, including a Harley Davidson Cake Decorating Kit!

First published on CBS News

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