For most business owners, growth and expansion are the key goals. However, how can you get your business expanding in today’s slow growth and lackluster economy? Here are 4 business expansion strategies that may help your small business move on to the next level.
- Add More Services and Products
This is a relatively simple strategy, but its execution is fraught with challenges. To begin with, you have to figure out what services and products your customers will need, and how much it will cost you to add them to your business. The next decision is deciding whether you will be able to sell these new products and services at a profit, and not hurt your profit margin.
The best way to get started is by carrying out a thorough market research before you commit any human and financial resources to expanding your services or products range. Find out from your current customers how they would feel if a certain service or product is added, as well as how they would feel about the prices. Market research should focus on the demands of the customer for new products as well as how much it will cost you to make, deliver and sell them.
- Segment the Market for Growth
You can also aid your business’ expansion and growth by tapping into a corner of the market that has largely gone ignored. Research the market to identify possible market segment customers through the Internet and even check with your localChamber of Commerce office. Find out who your main competitors in the field will be, whom they sell to, what they offer and underserved areas that require attention.
Market segment research will help you eliminate the larger market and carve out a niche for yourself. This will help you grow and expand your business in no time at all.
- Buy another Business
Acquiring another business is probably the easiest and fastest route to realizing expansion and growth. Acquiring or merging with another business literally doubles your business’ size overnight, growing your revenue sources exponentially. However, you will need to do a thorough due diligence to mitigate against risks associated with business mergers.
Your due diligence should mainly focus on the firm’s financial condition, depth of the management team, size of the client base and the practicability of existing contracts. As you consider companies you can buy into, look out for connections between your business and the other business, and see if their combined entity results in a stronger company.
- Seek Financing for Expansion
Analyze your current financial situation and find out if you have the financial strength to start your expansion goals, as well as to support ongoing expansion costs like the cost of bringing in more employees. Starting small business with or without a loan from a bank is easy, and you can look for financing options from the U.S. Small Business Administration (SBA) for assistance. The SBA has in place several financial programs that address the requirements of different small businesses.
Other options for getting a small business loan to support your expansion drive include credit unions and alternative online lenders that offer working capital loans. However, keep in mind that your marketing budget should be an integral part of your overall expansion efforts to help you avoid making the most common rookie small business loans mistakes.
The condition of the economy should not have a say in how your business expands. It is also important that as you carry out due diligence, consult with business associations, mentors, stakeholders and other information sources like magazines and books. Consider how you can implement some of the strategies above, and your business will be on the fast track to expansion sooner rather than later.