“Any intelligent fool can make things bigger and more complex. It takes a touch of genius, and a lot of courage, to move in the opposite direction.” (Statistician and economist, E.F. Schumacher)
Diversification makes intuitive sense. When one revenue stream falters, another should compensate. When one market cools, another heats up. In theory, it’s prudent. In reality, however, as businesses accumulate products, geographies, customer segments and internal processes, decision-making slows and execution weakens. What began as risk management turns into managerial overload. The uncomfortable truth is that sometimes executing fewer things extraordinarily well, for longer than competitors can tolerate, is sometimes the path to true success.
Whether you’re selling koeksisters from your garage or leading a multinational tech behemoth, the ten pointers below are worth taking note of.
Diversification offers psychological comfort. It gives leaders the sense that they are “covered” from uncertainty. But safety in theory is not safety in execution. Each new product, market or channel introduces its own operational demands, regulatory requirements, customer expectations and failure points. Risk doesn’t disappear, it fragments. Instead of managing one or two critical risks deeply, leadership is forced to shallowly monitor many. The illusion of safety often masks a rise in systemic fragility.
Every additional business line adds meetings, reporting layers, decision pathways and coordination costs. These costs rarely appear cleanly on an income statement, but they erode margins all the same. Management attention becomes diluted. Strategic conversations shift from “How do we win?” to “How do we keep everything from breaking?”
Focused companies learn faster. They serve customers better because feedback loops are tight and clear. When something goes wrong, causes are easier to identify and fix. When something goes right, it can be scaled with confidence. Diversified organisations often struggle to replicate this clarity. Success in one unit is obscured by mediocrity in others. Focus doesn’t just improve execution, it sharpens strategic judgment.
One of the most under-discussed drivers of diversification is discomfort. When growth slows in the core business, expanding outwards can feel more exciting than fixing what’s broken. Unresolved issues, weak unit economics, unclear positioning, operational inefficiencies … These things don’t vanish when you diversify, they multiply to new areas. The same leadership blind spots and process failures are often replicated across a wider footprint. If you’re wondering whether diversification might be hurting you, feel free to ask for our input – sometimes a fresh perspective is all it takes.
What works brilliantly in one context rarely translates seamlessly into another. Different customer segments require different value propositions. Different geographies demand different logistics, pricing structures and cultural understanding. Founders often underestimate how bespoke excellence truly is. Horizontal expansion assumes transferable competence – but in reality, each new area requires its own learning curve. The result can be a portfolio of businesses that are all “good enough,” but none exceptional.
Speed is one of the greatest advantages of entrepreneurial organisations. Diversification erodes it. As organisations grow broader, decisions require more stakeholders, more data reconciliation and more compromise. What once took days now takes weeks. Opportunities expire while you’re trying to coordinate a Teams meeting to discuss them. In fast-moving markets, this loss of velocity can be fatal. Competitors with narrower focus can outmanoeuvre diversified incumbents simply by deciding, and acting, faster.
Strong brands stand for something specific. They occupy a clear mental position in the customer’s mind. Diversification blurs that signal. Customers struggle to understand what the company truly excels at. Is it premium or mass? Specialist or generalist? Innovative or reliable? When brand meaning weakens, pricing power follows. What was once differentiation becomes confusion – and confusion is rarely profitable.
History is filled with companies that endured precisely because they stayed narrow. They dominated niches, controlled quality obsessively and reinvested relentlessly into their core advantage. Their resilience came not from spread, but rather from deep customer relationships, deep expertise and deep operational mastery. Concentration allowed them to absorb shocks because their fundamentals were strong, not because they were hedged.
Rejecting diversification does not mean rejecting growth. It means choosing growth paths that reinforce the core rather than distract from it. Vertical integration, geographic expansion of a proven model, or deeper penetration of the same customer segment can all drive scale without overwhelming complexity.
Most businesses diversify because they can, not because they should. Capital is available. Talent is curious. Opportunities appear abundant. But the cost of complexity is rarely paid upfront, it is paid slowly, in lost clarity, slower execution and diminished excellence. Leaders who understand this ask a harder question: what must we protect at all costs and what are we willing to walk away from?
“Today, it takes more brains and effort to make out the income tax form than it does to make the income.” (Alfred E. Neuman, Mad Magazine Mascot)
Provisional tax is among the most confusing aspects of the tax regime – and it’s also the most heavily penalised. There are numerous declarations and payments overlapping throughout each year, not to mention a raft of rules and exceptions.
The next provisional tax deadline for the 2026 tax year (coming up on 27 February 2026) is also the trickiest and most important provisional tax deadline of the year. This is because the income estimates declared must be highly accurate. A stiff 20% under-estimation penalty can apply if the declared income estimate doesn’t fall within 80–90% of the actual taxable income.
Our professional assistance is your ticket to avoiding non-compliance and stiff penalties.
Provisional tax is not a type of tax, but rather a way of paying an annual income tax liability in two or three payments during a tax year. This prevents taxpayers from facing one large tax bill at year-end when the annual personal income tax (PIT) return or corporate income tax (CIT) return is filed.
Making provisional tax payments allows you to spread the tax liability across the year. But it also creates additional administrative obligations (calculations, returns), and increases the risk of penalties – particularly under-estimation penalties.
The following rules apply to individuals and to companies / trusts with a year of assessment running from 1 March to 28 February:
Bear in mind that SARS can ask for your estimate to be justified, so you’ll need accurate records of all source documents and calculations used. SARS can even increase the estimate if they’re dissatisfied with your amount, and this is not subject to objection or appeal.
The rules of provisional tax are daunting and confusing, yet SARS holds provisional taxpayers responsible for their tax affairs.
SARS recommends that the provisional tax estimate is determined sensibly and by careful reasoning and judgement, in a mathematical manner, and using experience, common sense and all available information.
“The avoidance of taxes is the only intellectual pursuit that still carries any reward. (John Maynard Keynes)
Contributing to a Retirement Annuity (RA) before 28 February can reduce your taxable income and grow your long-term wealth. If you haven’t maximised your annual tax deduction for contributions to retirement funds, this is a good moment to review it. Got any questions – ask us.
Each member of your family (even minor children) can have a TFSA and you can contribute up to R36,000 per year to each account. Interest and dividends paid from and capital growth inside a TFSA are completely tax-free, making it one of the most powerful long-term investment tools available.
Donations to qualifying Public Benefit Organisations (PBOs) and some other donees that are approved to issue section 18A receipts, are tax-deductible (up to 10% of taxable income). If you’re planning to give, now is a good time to do so.
If you’ve realised capital gains this year, you may be able to offset them by realising losses on underperforming investments. This is known as “tax‑loss harvesting” and can help reduce your capital gains tax. If you’re unsure if this applies to you, we can definitely assist. There is also a CGT exclusion (up to R2 million in gains) on the sale of your primary residence so the timing of your house sale may have big tax implications (positive or negative).
South Africans enjoy an annual local interest exemption of R23 800 (R34 500 for individuals 65 or older). If your interest income is close to or above the threshold, it may be worth reviewing where your cash is held and whether a more tax-efficient structure makes sense. Our advice here could be crucial.
Make sure you have the necessary documents from your investment platforms, including:
These will make your tax return smoother and help avoid SARS mismatches.
If you’ve had out-of-pocket medical costs or other deductible expenses, gather those records now so they’re ready for your return.
If you’re a provisional taxpayer, your second payment is due at the end of February. Ensuring your estimate is accurate can help you avoid penalties later.
If you’d like help reviewing any of these items or want to explore opportunities specific to your financial plan, we are here to support you.
“The difference between successful people and really successful people is that really successful people say no to almost everything.” (Warren Buffett)
In a world where constant activity is seen as progress, the real high-performing leaders are doing something different. These entrepreneurs, CEOs and founders understand that not every signal deserves a response, not every problem requires an immediate solution, and not every opportunity is worth pursuing. In volatile markets, noisy feedback loops and emotionally charged leadership environments, doing nothing can be the hardest and smartest move you’ll ever make. Here’s why.
You don’t make decisions with insufficient informationIf the data is weak, contradictory, or incomplete, action often locks in the wrong conclusion. High-performing founders pause to gather better inputs, test assumptions, or wait for the environment to stabilise. Acting early may feel decisive, but it increases the chances of rework and wasted capital. Don’t hesitate to consult with your accountant, or other experts while you wait to ensure all data is as complete as possible before acting. You avoid solving problems that aren’t real yetMany issues in start-ups resolve on their own: customer complaints from edge cases, short-term revenue dips, internal friction during growth… Founders who intervene too early often create processes, complexity, or cost for problems that would have disappeared organically. Strategic inaction prevents over-engineering. You delay irreversible decisionsHiring senior executives, firing key staff, pivoting your business model, or entering long-term contracts are all hard to undo. High-performing founders deliberately slow these decisions. Waiting allows emotions to settle and consequences to become clearer. Speed matters, but not when mistakes are expensive. You prevent emotional decision-makingFounders are most likely to act badly when under stress. Losing a client, missing a target, or facing criticism is guaranteed to heighten feelings. Strategic inaction creates distance between the stimulus and the response. This reduces decisions driven by fear, ego, or the need to appear in control. You let existing systems run before changing themWhen something underperforms, the instinct is to intervene. You would be better off first asking whether the system has had enough time to work. Premature changes make it impossible to know what is actually effective. Doing nothing (for a while) is often the fastest way to learn. You conserve focus and organisational capacityEvery new initiative pulls attention away from existing priorities. Try to recognise that your company’s capacity is limited. By choosing not to act, you will protect delivery on what already matters. This is especially important as teams scale and coordination costs increase. You use time as a risk-management toolWaiting can reduce uncertainty. Competitors reveal their strategies. Markets clarify. Customer behaviour becomes more predictable. Strategic inaction is often about allowing risk to resolve itself before committing resources. The bottom line: Choosing not to act is still a decisionDoing nothing is not neutral. It must be intentional, reviewed, and time-bound. Experienced entrepreneurs track what they are choosing not to do and reassess regularly. Remember, strategic inaction works only when paired with attention and accountability. |
