How to Successfully Expand Your Business
Recently, I was talking to a friendly fellow business owner about the status of her small bakery business. A few months ago when we chatted, she raved about how much she loved her staff, how comfortable she was with her home and work lives, and how absolutely inundated she was with customers. Last week, she told me that she is going to have to close her doors. Immediately, I diagnosed her problem: She didn't expand her brand soon enough.
Expansion is a risky business endeavor that requires more time, money, and energy than your current enterprise, but once a business reaches a certain capacity, there are only two options: grow or die. Because my friend neglected to expand her bakery in any way, her business regrettably bit the bullet. If your business has been buoying in shallow business waters for some time, it might be time to head farther from the coast with a much-needed expansion.
Four big benefits of expansion
Expanding a business certainly does not come without a heaping dose of risk. If an expansion is done improperly, a business could flounder in a number of ways: You could spread your resources too thin, causing you to underperform across the board; you could under-prepare for supply chain changes, disrupting your flow of supplies; you could neglect security measures during the transition and fall victim to a major data breach.
However, if you are like most entrepreneurs, you are nothing if not daring, and in order to ensure that your business flourishes, you must take risks. Expansion is perhaps the most rewarding risk there is. Consider the following benefits:
- Better space. Location isn't just important in real estate; having a properly placed business is a key component of success. By expanding, you can select a more profitable location to do business.
- Bigger audience. By expanding into a new area, you have the opportunity to reach an entirely new group of people who could easily become dedicated fans, potentially doubling or tripling your current customer base.
- Better staff. Not to say that your current personnel aren't top-notch, but expansion provides the opportunity to hire talented employees with diverse skillsets who can help your business grow in new and better directions.
- Better financing. Securing initial financing is an entrepreneur's worst nightmare, but expanding allows you to show financial institutions that you are responsible with your business's money. You should have access to whatever funding you need to grow.
Checklist for expansion
Now that you understand the importance of expanding at the proper time, you must learn when the proper time to expand is. Expansion shouldn't always immediately follow success — expanding too soon is as dangerous as not expanding at all. You can use this checklist to determine if you need to expand now or later.
- You aren't searching for customers. While you might maintain a low level of marketing, you don't have to expend a majority of your energy attracting new clients and customers. You might even have so much new work that you can barely field all of it.
- You trust your team. A high-performing team is absolutely necessary for high-performing businesses, but having a reliable group of employees is also mandatory during expansions, when bosses will have less attention to spare on disappointing productivity.
- You understand your limits. Just because you dominated your current market doesn't mean you can conquer another one. You should do your research before committing to expanding in a certain way; sometimes, saying "no" allows you to grow in other ways.
- You have balanced work and life. Expansion takes twice the effort of simply managing a business. If you have recently expanded your family (or are in the middle of another big lifestyle change) you might want to put off expanding your business.
Areas to expand
Expansion doesn't always mean adding square-footage or picking up a second location. There are many ways your business can grow to be stronger and more profitable. Even if your business isn't quite ready to expand in one of the following areas, you might find benefits by expanding in a different one.
- Space. If you are cramming merchandize into every nook and cranny, you might need to find a bigger and better location.
- Additional locations. A single brick-and-mortar store is easy to manage, but several locations can attract faraway customers.
- Employees. A startup might have one or two workers, while a small business could have up to 50. Perhaps it is time you added more staff in diverse positions to help your business grow.
- Digital locations. Social media is an invaluable marketing tool, and e-commerce promises to explode in profitability in the coming years. You might need to take a step into the world of digital business
Related: The Mentality of a Successful Career
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