For diversification to really work, you need to have a big corporation, right? Wrong! Even if you're a sole proprietor working without employees from a home office, diversification is one of the best strategies for protecting your income in good times and in bad. The philosophy is simple. Invest your time and money into more than one project. The more difference between them, the better. Find income opportunities in different fields, with different sources and different customers. The more differences between you projects, the more protected you are against a lot of disasters. Should a source for one of your projects dry up, for example, you're income from the other projects will continue on. You'll suffer a small, but not complete, setback.

It's obvious how large corporations use this strategy. They do it all the time. Of course they have the resources and the time and the ability to hire, etc. How can a new entrepreneur just getting started utilize a diversification strategy? Would it even help protect a business that is barely off the ground?

Definitely, yes! You just need to ask yourself the questions that will lead you to the right opportunity. Of course, you need to get your primary business profitable first. Then it's time to start thinking of diversification. Build off your original business at first. Find something that uses similar skills, resources, or knowledge so you can easily turn it into an income stream. Later you will have more income, and therefore, more opportunity to diversify even further into areas where you may have to purchase new facilities or education to accomplish your goals.

Let's look at a simple example. If your small business is based on your writing articles for other people's websites, how would you diversify to protect yourself in case the demand for website writers disappears? This one's easy to see. You're talent is writing. There are many other outlets for writers. Check eLance or goFreelance or Guru -- websites who match up writers (and others) with those seeking to hire writers. They look for e-Book writers, resume writers, sales copy writers, and many others. You can diversify in your own field, gathering more and more experience, making you hireable for many types of projects, not just articles. Or you could diversify in the direction of website ownership. The experience and talent you've been using for other people's websites can be used for your own monetized website on a subject that interests you. You have another income stream from a totally different source.

What if your current business takes all your time now? If this is the primary deterrent to diversification, find a way to eliminate it! As long as you're making money, find ways to automate or hire out the more mundane tasks. Look to the eLance or Guru websites to find reasonably-priced, professional help with writing articles, blogs, sales copy, etc. You can find coders there and many other types of professionals willing to lend a hand for a fee. You may even find it's time to take on a part-time or full-time employee. As you automate and hire help, you free up your time to get involved in other things. It's well-worth the effort to do so, as this diversification protection is one of the best things you can do to keep yourself in business.

So whether you have a big company or small, diversification is one of the best ways to keep it an on-going concern with continuous income with smaller variations. As well as protecting that income, well-planned diversification can help alleviate seasonal fluctuations inherent in your current business. All in all, no matter what stage your business is at, it's time you got involved in diversification.