Strategies for Expanding Your Business
So you’re thinking about expanding your small business. Congratulations! That means you’re doing well enough to consider tackling new challenges and opportunities. At the same time, you need to make well-informed strategic decisions before you take such a big step.
- What’s my current stress level? Expanding a business requires extraordinary focus and often draws a business owner’s attention away from daily operations and toward future concerns.
- Do I have access to expansion capital? You may need funds to cover marketing efforts, hire additional employees, and/or relocate to a larger site.
- Will the technology I have now support a successful expansion? You may need to plan for a comprehensive upgrade to your business processes.
If you think your business can address these challenges, here are some proven expansion strategies to consider.
Relocate or add a new store. Build on the knowledge you’ve acquired about your customers — their needs, desires, and buying preferences. Look for an area with a similar customer base, within your city or even in another state or region. If your competitors aren’t serving those prospective customers, this may be the ideal new location for your business.
Before taking any concrete action, do some in-depth market research. You need to thoroughly understand the potential obstacles that moving to a new geographic region may entail. For example, is there a significant pool of qualified job candidates in the area? What about other resources your newly situated business will require?
Develop a new sales plan. Your goal in expanding your business is obviously to grow sales, which is fine as long as your infrastructure can support it. Is your existing sales process flexible enough to accommodate a sharp increase in opportunities? Can your sales team adequately cover a whole new territory, or do you need to take on additional staff? How up-to-date and technologically responsive is your current CRM system?
A key element in your shifting sales strategy is the existing cost structure for your goods or services. An anticipated jump in sales should prompt a re-examination of your prices (never undervalue your offerings), as well as your purchasing arrangements with suppliers (more business from you might present an opportunity to negotiate lower rates).
Grow your range of offerings. Businesses should avoid the “trap” of providing only one product or service. What new and different ways can you serve your customers? Are there logical extensions of what you currently offer that can be designed and produced?
Look at how your customers’ needs have changed over the past year or so. Consider evolving your offering (by either tweaking its current features or giving it a major overhaul) to draw more interest from loyal customers and attract new ones.
Explore new markets. Your small business may have great brand awareness in your community, but what’s involved in expanding that awareness to a much larger market? Before moving ahead, assess how much overlap there is between the customers you serve now and those you’d like to serve in the future.
How do your prospective customers differ from your existing ones? Do they have significantly different expectations and needs? Who else is competing for that customer base?
When your business has reached a certain plateau of growth, expansion is the logical next step. Opportunities for future growth are plentiful, as long as you plan ahead in a rational and knowledgeable way.