Just about all entrepreneurs and business owners have expansion at the top of their goal list. While growth can seem like a distant goal, in reality, there are simple steps you can take to get your business to the next level.
1. Add New Services or Products
Adding new things to your product or service lineup sounds simple on its face, but you do need to execute it well. First, you’ll need to determine what your customers want and how much they are willing to pay to satisfy those wants. Once you know that, you can determine whether you have the means and materials to sell new items or services for a profit before you even launch.
For example, the fabrication industry creates items for a myriad of clients. From medical institutions to aircraft parts, a fabrication company has a lot of potentials to expand if they have the machinery and equipment for the job. However, it’s about weighing the costs; you can find fabrication machines and CNC machinery here, for example, but how long will it take to pay off your new investment? Do you already have clients or a market for your new service?
Conduct thorough research into the market before committing any of your resources to service or product expansion. Find out what your current customers think about your new item or service idea and the price points you’re considering. Even the best product or service will flounder if most of your numbers to break even don’t match the demand of your consumer base.
Combine the information you gather from your research with your estimated selling, delivering and manufacturing costs to see if you are on the right track. If you don’t like the results, don’t give up. It’s just time to tweak your ideas or go back to the drawing board.
2. Sell More to Current Customers
The flip side of the first approach, start to go deeper into your current customer base. Do a market segmentation analysis so you can see which customer segments are primed to buy right now. This allows you to better focus your marketing and sales efforts, as noted by the Green Book Directory.
Your analysis should split your customers into segments from the relevant criteria that you select, such as buying history, location, age and gender. Take a closer look at the potential profitability of each segment so you can spend your marketing and sales dollars more wisely.
3. Move Into New Markets
It’s time to market and sell your current line to new customers, namely people in different locations or customer segments than you currently operate in.
For a retail or storefront location, this expansion type usually means opening new spots in different geographic areas. This means time and money, so do market research beforehand to ensure there is enough potential demand in these markets to justify the move.
An all-digital operation would need to use geo-targeted marketing or try new marketing angles designed to reach the untouched segment. As with a brick-and-mortar location, some market research is necessary beforehand to ensure you’re not wasting resources. If you’re not sure how to approach the new market, consider working with a marketing consultant who is familiar with the area or customer group.
4. Focus on New Customer Demographics
Like most businesses, you likely target your marketing and sales efforts on specific customer demographics, such as location, gender and age, or use deeper psychographics like values and interests. This is not a bad strategy, but it could cause you to miss out on other viable segments.
Using the appropriate medium, you could target the right consumers and expand into new segments. Of course, once you think you’ve found a potential demographic you’ve never reached out to before, you will need to ramp up your advertising efforts to that group to see any real results.
5. Explore New Sales and Delivery Systems
The Internet is a great example of how a new channel for sales and delivery can entirely transform a business. Many companies have reinvented themselves to benefit from the opportunities the web brings, from brick-and-mortar retail stores going online to service providers using the web to reach new customers. Once a novel thing, online sales of physical items accounted for $365.2 billion dollars in 2019 alone, according to Statista.
Don’t be afraid to explore new ways to sell and deliver services and products to your customers. If you need some inspiration, take a look at what your strongest competitors are currently seeing success using. It also doesn’t hurt to investigate what systems your competitors have tried and failed at, too.
6. Merge With or Acquire Another Business
A rapid and well-known route to expansion, you can merge with or acquire another business to grow fast nearly overnight. Of course, you still need to do due diligence on any potential merger or acquisition candidates before you move forward with the deal.
Specifically, you need to focus on the other company’s management team’s depth, strength, financial condition, client base and the soundness of any contacts in place. When you consider companies to acquire or merge with, think about how the two companies will interact once combined — you want to end up with one company that is stronger than either of the two individual companies on their own.
Be very careful with any financial information you receive from a merger or acquisition candidate. If something seems off on paper, it is probably off in reality. Work with an attorney and accountant who have experience in your type of industry and business format to help protect yourself throughout the process. But even with a professional consultant you should do the research yourself and learn about M&A as much as you can. A good place to start would be this Wall Street Prep guide on mergers and acquisitions.
You don’t have to wait for perfect economic conditions or the “right time” to start growing your business. Consider how you can use one or more of the six approaches above to start growing your company right away.