November 18, 2015
After the economy took a nosedive in 2007, many small businesses collapsed. Still, many also survived. Out of the survivors, two types of business models emerged. One type survived by slashing costs, by reducing their resources and brainpower. They settled for a smaller market. This was akin to a balloon jettisoning most of its cargo to stay in the air. Yet another type of business emerged, as well. This one was so well run and popular with its niche market that it not only survived, it thrived.
If you run one of those successful businesses, you may wonder if you should now expand your business. It did well in tough times. Now, in a better economy, it might soar.
You can just imagine your new business already. It focuses on professional development for key staff. It offers high quality products and services. It provides excellent customer value. And it has excellent customer service.
If you’re thinking of expanding your business, here are three questions to ask:
Should you expand your business?
There are many ways to grow your business:
- You can provide better products or services for your customers. You can buy new equipment, or improve your selection of inventory. You can offer more services, or enhance the quality of your services.
- You can reach out to a wider audience by expanding your marketing efforts. Online, you can create joint ventures with complementary businesses. Offline, you can set up branch locations.
- You can improve your customer service. Give your clients more service options, add more support people, and increase support hours. Make it easier to get in touch with you through a tech upgrade. Perhaps, replace email support with VoIP phone systems to better serve customers through a live conversation.
- You can improve marketing and sales. Try out new marketing channels. Offer your existing sales people more professional training. Tap into complementary market opportunities.
- You can improve business relationships to increase your influence. Join groups, organizations, and associations in your industry. Attend industry conferences. Speak at seminars.
How will you expand your business?
While you can choose more than one way of expanding your business, it’s best to just choose one at a time. This will give you enough time to plan, try out, test, and revise your processes. If you have too many expansion ideas unfolding at the same time, it can be difficult to trace what is working.
It may be overwhelming to try out too many ideas at the same time. Everything may collapse because of insufficient time and attention paid to each one. So it’s better to go slow. It’s better to expand on one idea at a time.
Begin by making a list of best ideas. Then choose just one idea to work on. Don’t discard the other ideas. Just put them on a waiting list. In this way, you’ll be able to work on all your ideas, but at a realistic pace.
Sometimes it might be difficult to decide on a few good options. By doing some research, you will be able to gather the information you need to help you make the best decision.
You may also want to consider what competitors have done. Try to figure out why some ideas worked out better than others.
Research can be formal, like creating a report or running a survey. It can also be informal, by getting advice from others in your field. And, of course, it can be a combination.
Are you ready to expand your business?
There is one last thing to consider: will you benefit from expansion. If you miscalculate, your business might fail. It you expand like a balloon it might burst because of too much pressure.
To figure out the benefits, you have to consider 3 things:
- What is your current size doing for you?
If your business is successful right now, it’s because your income exceeds your expenses. You have a winning advantage over many businesses already. Once you expand, your overheads will expand as well. Will your income still stay ahead of your expenses? Just because you offer more does not mean that your income will continue to exceed your expenses.
- What will your customers think?
One reason your business may be successful is because it’s small. Since it’s small, it’s nimble, rapidly adjusting to market fluctuations. Since it’s small, it’s efficient. Since it’s small, it meets customer needs. If you grow your business will you be giving your current customers less value? Will they remain loyal or look for another small business to take care of them.
- Will you be able to handle it?
Do you and your staff have the time, energy, and resources to take on more work? If you are already working full out, you can’t find the time to nurse your expansion ideas into maturity.
Create a Vision
If you do decide to go for it, to grow your business, start with a vision. Then begin answering these three questions from the perspective of that vision.
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