Getting your business off the ground is the first hurdle and those fortunate enough to survive it have to figure out the next biggest step — expansion.
Being a successful entrepreneur, you worked very hard to get your business to its current state. The late work hours and stressful amounts of work load have finally paid off. What’s the next step? Where do you go if your startup survives?
In this article, I’ll review some of the most popular business growth strategies employed by successful businesses. The method you ultimately decide to go with depends entirely on the nature of your business and how much time and effort you’re willing to put into it once again.
Are You Ready for Expansion
Knowing when your business is ready for expansion is perhaps one of the most perplexing questions that often stumps budding CEOs and entrepreneurs. (Hint: It won’t come to life and tell you.) To help you out, we’ve put together a checklist of sorts that will help you determine if you’re ready for expansion:
- You’re meeting goals on time and within budget.
- New clients come to you.
- Your well-oiled team can handle the additional work.
- You have the budget for expansion.
If you can easily cross-off all four of the list items then it’s safe to assume that you’re in a good position to take your business to the next level.
5 Ways to Expand Your Business
Let me start off by saying that there are hundreds of ways by which your business can grow. In this section, we’ll look at some of the most used methods and briefly go over them.
1.New Location and Franchising
First on the list we have physical business expansion which essentially means that you open up your store or office in other locations. Although this method isn’t the safest form of expansion, it is the traditional method that comes to mind. Setting up your business in a new location in hopes of growth and success is a far cry from reality.
A common mistake that entrepreneurs make is that they assume “I set up the business in Location A, I’ll use the same technique for Location B.” This assumption is at fault on so many different levels. First of all, you cannot use the same business plan for both locations. Secondly, if your business’s staying power isn’t strong then there’s a high chance that your business will not only fail miserably in Location B but you’ll also suffer significant loss in Location A.
However, if you’re doing great on the books (without any bribes!), your financial officer agrees that it’s a good move for the business and your team is on board then expanding your business to a new location can prove to be most profitable.
2. New Target Markets
Based on the product or service you’re selling, you probably already have a target market that’s serving your business needs well in terms of sales. Have you ever thought about targeting a new market within your niche of customers?
Expanding your target market and taking new horizons into consideration is a smart move for any business that’s looking to grow. If your current market comprises of millennials, you could think about advertising in places where your target market tends to hang out or on social media sites.
Having a strong web presence today is more important (and essential) than ever before. It goes without saying that if your business doesn’t have an e-store to go with it then you’re missing out on a large number of sales. According to Statista, 40% of Internet (nearly 1 billion online buyers) users have purchased products online.
The Internet enables store owners to reach a much larger target audience (the whole world!) without having to go through the trouble of setting up a physical outlet or a franchise. Best of all, setting up an e-store will get you a tremendous increase in sales without breaking the bank. It’s a win-win!
Product and service diversification isn’t for everyone but if your business is fortunate enough to fit into this category then you’re looking at some low-cost solutions for successful business expansion. CEOs who opt for product diversification often back up their decision with a simple statement — it fills the seasonal void.
There are several paths you can go down to start out. For instance, if you’re not sure what how your target market would respond to the new product / service, you could offer it free of charge for a limited time and collect feedback.
5.Mergers and Acquisitions
At times your business takes a turn for the worst and doesn’t survive the winter of growth on its own. Times like these call for desperate measures to save your business from sinking altogether. CEOs take to forming mergers and alliances with similar companies which enables both to grow together.
In a scenario like this, as an entrepreneur, you’ll have to evaluate why your business couldn’t grow on its own. Did you not have enough resources? Or perhaps your vendors were giving you a hard time? Regardless of what the reason may be, you’ll need to find another company (preferably of the same size) that can make up for your business’s deficiencies.
A Bird’s Eye View of Expansion
One of the most basic things to keep in mind is that your business will bring out more profit provided you undergo successful expansion. Bigger business = more profit. Another major plus of expansion is that you can save a ton of money on raw products. Remember: everything’s cheaper when you buy it in bulk.
Often times, entrepreneurs get all caught up in the pros of expansion and the thrill it brings that they forget about the additional workload they’ve agreed to take on. More employees to manage. More wages to give. On one hand you’re earning more money but the cost of day to day operations also goes up.
Over to You
I’d like to conclude this article by saying that business expansion is inevitable for successful startups. I hope that this article will help you make an informed decision on which avenue of business growth to adopt to remain profitable.
Which business growth strategy do you think is the best for your business? Would you like to add a growth strategy to our list? Let us know in the comments section below!