You have been working hard at your small business and now it is time to spread your wings, but how? There are many options on how to expand your business but before you expand you need make sure you are truly ready by answering these three questions:
Are you achieving your goals?
When you set out business goals are you capable of meeting or exceeding these goals. Do you achieve the goals every time? These goals refer to your sales, business plan and marketing objectives. You must also consider if you are making a good profit or are you only sliding by or breaking even. If you making a small profit or break-even, then it may be good idea to hold on with your expansion dreams until you are doing better.
Are you and your employees committed?
When you expand your business there will be a lot of teething problems which could cause people to re-evaluate their work situation. It is important that you and your team are committed to seeing the expansion through and that you won’t bail out when the going gets tough.
Can your business be expanded?
When you consider this question we need to make sure that the new revenue from your growth venture will far outweigh the cost of growing. When you grow, your expenses also tend to grow so it is important to be sure that you will be able to cover the expenses involved with growth.
After you have answered these three questions you can move on to looking at the options available for expanding.
Option 1: Open up a new branch
When considering opening a new brick-and-mortar store in a different geographical area, you must be prepared to invest a lot of time and money into this venture. Because of the financial and time investment, it is important to do thorough research of the new geographical area. It is important to note who your competitors are in the area and how you can improve on their offering.
Option 2: Franchise your business
This option has some great benefits but it has a few drawbacks which are important to consider. The benefits are that you will be using your franchisee’s money to establish a new branch. You will also have the local knowledge of the new market from your franchisee. Furthermore, you will not have to worry about taking care of new staff members and you will not have to deal with challenges of opening a new branch. The drawbacks are that you will get less profit because you will need to share it with your franchisee, and you will also have less control over how the branch is managed.
Option 3: Form an alliance
Is there a complementary business in your area? Why not form an alliance with them? This will give you quick access to a whole new set of customers. It is important to ensure that the service or product will complement your business. Another matter to consider is the reputation of the business you are associating with. This could have an influence on your brand. Therefore, it is important to do an extensive background check on the business before you go into partnership with them.
Option 4: Acquire another business
Another way to get a quick list of new customers is to buy out another business. If you see a business for sale which is in your industry, you can buy them and get access to their customer list as well as potentially some great employees.
Option 5: Diversify your product offering
This option requires research into your current market and see what they would like to have added to your product offering. It is important to consult with your loyal customers and see what their needs are and if you can offer a product which will satisfy that need. If you have the resources and skills to create the product, then this is a great way to expand your business.
Option 6: Expand into a new market
Can your product be used by a different market? Sometimes it is important to think outside of the box and see what other potential markets your product could service. Maybe if you are a hairstylist who focused mainly on woman’s haircuts, you could think of also doing children’s hair and this would create a great opportunity for moms and children to enjoy a pamper session together.
Whichever option you choose to expand your business with, it is important you understand the financial and legal implications of each expansion option.
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