Expansion can take on different forms, depending on business needs. Expansion can include casting a wider net as far as location and market demographic go, hiring new employees to handle increased demands, increasing production, or increasing sales as a response to successful marketing campaigns. Expansion can feel like a difficult and risky step, so here are a few tips to help you identify the ways and directions that will be most efficacious for your business.
How to Know When to Expand
The business world today can’t handle stagnancy. Continuing to be competitive means continuing to grow, expand, and innovate. While everyone in business might aspire to working at capacity with a full schedule and healthy income, this goal is something that few entrepreneurs really meet. Capacities constantly expand to accommodate growth—workers are hired and technologies are acquired.
The main goals of most expansions are to attract new customers and increase monthly revenue. Expansion is risky, expensive, and should be undertaken gradually. If you decide to expand, you’re encouraged to make a coherent plan and create a long-term growth strategy.
Is it time for your company to take the next step?
What to Think About When You Consider Expanding Your Business:
When you consider expansion, it’s important to remember not just to look at your books and numbers, but also consider talking to your employees and customers as well. The easiest expansions (and none are easy!) will most likely include tapping into unused talent that you already have on your workforce or making a move on ideas that were put on the backburner while your business stabilized.
Evaluate whether the culture of your company is conducive to expansion. Are you attracting motivated talent, and do they share your views for growth? Ideally, motivated employees should feel the freedom to contribute to the company’s success. This kind of participation would allow employees to be committed to the company, and driven to push it into the future.
Check the books to see where the capital for expansion will come from. Do you have a plan to get the capital that you need for expansion? Ideally, venture capitalists could help this cause by investing in your growth. But if you must foot it on your own, you might need to cut back on expenses, use freelancers until the expansion justifies hires, or even take out a loan.
Growing businesses can’t afford to ignore their market. Use online polls, customer studies, and customer feedback to continue to study your market. Use market research and analytics to push your growth phase in the right direction. And don’t forget to check out the competition, especially if you’re considering a location or demographic expansion.
As you plan your expansion, take it slow and know your limitations. That goes for you personally as well as for your business. A business that is expanding will take up more of your time than usual. During the expansion, try to continue running the original business as usual and don’t lose sight of your original customers.
Forms of Expansion
1. New Locations
Local expansions are easiest to manage. You could consider expanding to a different part of your city, a new neighborhood, or a new city in your state. This is a slow and grounded growth trajectory that will bring you a new customer base without bringing a massive increase of brand awareness.
Even if you’re planning to open a new location in a close but different neighborhood, it’s best to do your research on that new location’s local attitude. What businesses survive there? Will you new location have a different vibe to fit in with the locals, or will it maintain a consistent representation across all locations?
Expanding your brand to another high population area or city is an even more risky expansion with potentially higher rewards when it comes to growth and brand awareness. For instance, if you’re operating in Denver, you might consider expanding to Portland or Seattle. This requires a well-organized remote expansion team, and a lot of research on the branding decisions as you move into a new area.
2. Appealing to a New Market Demographic
Using your original base of operations, it’s not a far cry to start marketing and producing for an additional demographic. If your brand is primarily targeted toward adults, you might expand to include children as well.
There are a few things to be sure of before investing in a new customer base. Study the new demographic, so that you know what appeals to them, the best place and form to reach them for advertising, and whether your sales methods are convenient for them.
3. Growth through Recruitment
If you’re happy to stick with operations but would like to be able to expand your reach, hiring new talent is an investment that can contribute greatly to long-term growth. This is a good option for companies that find themselves needing to turn away work because they have been overloaded with demand, or for companies that wish to expand their offerings.
It is also a good idea, depending on your business model, to bring in-house some of the positions that you might have been hiring freelancers for, to solidify your stability and expand the reach of all your departments.
Recruiting for the sake of expansion generally means that more expansion is on the way. For the sake of future growth, hire for versatility. Assemble a team that will enable expansion by hiring individuals comfortable with filling several roles as needed.
4. Run a Marketing Campaign
Increased or new marketing is one of the first things a company should think of when facing stagnation. A new marketing campaign could mean boosting your social media marketing, starting an email newsletter, working on content with your blog, working with an influencer to boost your brand, or going local with advertising and outreach.
In this growth boost, it might also be a good consideration to retain your current customer base with loyalty programs and returning customer promotions.
5. New Merchandising and Innovation
Brands that rely on sales will often consistently carry a limited number of best sellers while also circulating through some new, exciting, and trend-topping things. Introducing new merchandize is a great way to keep your customer-base hooked, and the more hooked they are the more they will be talking about you.
Alongside new merchandise are new innovations, including the development of new projects that will hook your customer base. These could be limited addition add-ons to your standard product model, software updates, or increased technological compatibility.
So now that you’re brainstorming and opening the dialogue about your expansion, don’t stop there. Talk to your advisors and mentors, and start designing a long-term growth strategy. This will keep you one step ahead, as momentum on your growth increases.