You've worked hard to create a successful business, and now you're ready to take it to another level. There are plenty of ways to expand; you just have to decide which method is right for you.
To help you work through the problem, we shed light on several entrepreneurs who found ways to grow their businesses and boost their profits.
1. Merge with or acquire another business. When Jayne Hancock Group acquired 14-year-old Townsend Inc. in July 2007, it was simply the next logical step in a 2-year-old relationship.
The two agencies had been working under the same roof for two-and-a-half years. Jayne Hancock's firm was a fast-growing marketing group specializing in media, sports and technology, while Jackie Townsend's was a leading technology PR firm focused on branding and PR.
"It was almost like a no-brainer. It was almost like, we can't do this and not come together," Hancock says.
The company that emerged out of the acquisition, JHG-Townsend, helps companies create their branding and messaging, then helps them apply it in traditional and new media markets.
Hancock and Townsend decided against a co-CEO setup for the new company.
"You don't want any cloudiness about the structure and who's going to make the decisions," Townsend said. So Hancock took the top position, and Townsend became executive vice president.
Both say the merger thus far has been terrific. "Everybody's starting to feel and see an energy that we all visualized by doing this," Hancock says. JHG projects $8 million in earnings for 2008.
If you're considering an acquisition, Townsend says you should get to know your potential partner well before committing to a relationship.
"Know what it's going to be like to work things out in the tough times," she says. "If you know you can get through the difficult conversations you need to have, then you know you can get through a partnership." Such conversations, Hancock says, involve strategic or operational decisions, ranging from investing in new systems to opening a new office, bringing in a new hire or making an acquisition.
2. Spin off new profit centers. Jocelyn Silverman started 304 Media, a boutique advertising agency, six-and-a-half years ago. Since then, she's branched out with two more companies: Short Run Cards and Creative-Juice. Short Run Cards can produce small runs of plastic, personalized VIP cards in only two days. The cards are used for loyalty programs that offer discounts or points to cardholders. Creative-Juice offers creative outsourcing solutions that produce design services for larger advertising and PR agencies.
Short Run Cards came about after 304 Media ordered its own set of VIP cards.
"No one could do the turnaround on the cards," Silverman, 28, says. So, like many an entrepreneur, Silverman decided to do it herself. She purchased equipment, and leverages her employees' free time to design the cards and print them in-house. Now 2-and-a-half years old, Short Run Cards made a small profit its first year and has gained traction each year.
Creative-Juice was born out of necessity in March 2007, to make up for the loss of a client that provided 30 percent of 304 Media's business. The gamble is working well.
"Every month has been better than the last month," Silverman says. The three companies combined grossed nearly $400,000 last year, and Silverman anticipates a 40 percent increase in 2008.
With the success of her spinoff businesses, Silverman will launch another related business, StorkMagnets.com, this month. It will produce birth announcement magnets online. It's the ultimate example of leveraging resources, Silverman says, because all of the design and programming are already complete and the website is completely automated. In fact, Silverman expects StorkMagnets to quickly become her primary source of revenue.
"We have received incredible feedback through our initial testing and have several people anxious to place orders," she says.
3. Use subcontractors. Kris Putnam-Walkerly founded Putnam Community Investment Consulting in 1999 to help foundations and other nonprofits develop effective grant-making programs and initiatives. She has a full-time office manager and an executive assistant but relies on subcontractors to provide the consulting expertise needed on various projects.
"It's an effective way to bring on people for a short period of time," she says. It gives her a wide pool of experts. It also allowed her to grow the business while raising children "and not grow into a crazy person," she says.
All subcontractors use an e-mail address linked to Putnam and also rely on Putnam's 800 number to make the organization look seamless.
4. Open a second, virtual office. Putnam achieved a new level of growth in 2007, when Putnam-Walkerly moved from Oakland to Ohio to join her fiancéé. She opened a virtual office in San Francisco in place of her Oakland office and announced that Putnam was expanding nationally to serve clients better.
"It didn't hurt my California business at all," she says. In fact, Putnam-Walkerly says, she grossed $800,000 in 2007, twice the amount amassed the previous year. She hopes to exceed $1 million this year.
The virtual office in San Francisco keeps expenses down. The rental company provides a phone number and a receptionist, plus office space and equipment that Putnam-Walkerly can use when she's visiting California.
5. Launch a new division. Kristen Marie Schuerlein is founder and CEO of Affirmagy, which sells cuddly blankets with inspirational messages. Affirmagy, which launched on Valentine's Day 2005, sells direct to consumers through its website and also wholesales the blankets to independent retail shops, including church bookstores.
After a couple of churches used the blankets as profitable youth group fundraisers, word started to spread. Shortly thereafter, Schuerlein realized that 60 percent of her wholesale sales could be attributed to church fundraisers.
"My business partner and I looked at each other and said, 'Wouldn't it be extraordinary if we built a turnkey way to be in service to this community of people and grow our business through fundraising?' "
That idea led to Positively Fundraising, launched as a separate division in March 2008.
"It's an effortless way to encourage and take advantage of the natural buzz and word-of-mouth that was taking place with our product," Schuerlein says.
It's also in alignment with Affirmagy's core philosophy of service to others.
"From my perspective, it's a really cool way to grow my company. It feels right," Schuerlein says.