How to do Growth / Expansion, Diversification, Partner, Due Diligence, ROI, Quality, Innovation, Hiring, Limits, SWAT, Plan, Customer, Risk & Rewards, Conclusion
Dream. When you first started your business, you may have had the dream to make it big one day. You might have noticed increased customers, greater profits & higher market value. Maybe it is time to make this dream come true!!!
Expanding. When thinking of an expansion, it might be to grab an opportunity or to survive the market. However, expanding your business is a crucial step that needs careful planning.
Tips\Ways. In this article, we will discuss the tips\ways to expand your business and the points that you should consider before doing so. When you plan to grow your business, you might consider, introducing a new product or service, getting into a new market niche, partnering with another company, etc. Here are some of the common expansion strategies for your consideration.
Best Market Expansion Strategy
One strategy involves increasing market share by selling the same products in the same existing market, but lowering the price or making other offers (ie, freebies) Another strategy is selling your current products in a new market. Here are some other Tips on this strategy.
1. Product Expansion Strategy
Under this type of strategy, you add features to your existing products or expand the product line while still selling in the same market niche. This will attract new buyers.
2. Growth Diversification Strategy
In this type of strategy, a company sets out to sell totally new products to a new market. As a small company, this can be a risky strategy and needs careful market study to ensure if your new product will be liked and accepted by the new customers or not.
3. Partnership with other Companies.
An Partnership strategy means you work with another company – with compatible products – to expand your market opportunity. This type of strategy can help to boost your product line – when you enter the market.
4. Do your Due Diligence.
Before you rush into any expansion decision or action, you need to examine all the options available first. Gather sufficient information about the options you are considering. Try to figure out the possible reasons you could fail and ensure that you are well prepared for those possibilities.
5. Be sure you know Numbers – ROI.
Business expansion usually involves investment. When you invest funds toward the development, such as equipment, production, staff, promotion, etc, make sure you have your Cash Flow figured. You must have enough funds for these investments and also plan when & how you can bring in your return on investments (ROI). It is advisable not to consider business expansions before clearing your debt, you’re well past break even & have sufficient cash reserves. By adding too much on debt, you will not be able to make the best of your expansions.
6. Ensure you are not sacrificing Quality.
While expanding business, it is necessary to remember that customers are directly responsible for a company’s growth. While growth will be challenging, it is crucial to keep in mind not to compromise quality. You must make it your priority to maintain the same standards of quality that customers are used to. You must focus on analyzing every aspect to maintain your high standards.
7. Look for Innovation opportunities.
When you plan to expand your business, think of ways you can bring in creative innovations. Many opportunities and other possibilities exist to modify a current business model and create newer & better versions – which is crucial for growth in any business.
8. Team Expansion options.
With ideas of expanding your business, you might also be thinking of expanding your Team. Consider part-time Consultants or others part-timers of skill sets you need. If can afford, bring on full-timers to fill the gaps of your needs. You can even offer lower compensation, if you give them a piece of the action – stock – as future compensation. This strongly enhances loyalty, because they will benefit from good work.
9. Consider all Organizational limits.
When planning your business expansion, you need to consider your organizational limits. Like any other organization, it has a limit. Research & development to create & introduce new products or services – and grow – are necessary for continued motivation & customer satisfaction to maximize profit. However, you should remember not to overdo it. Overlooking or stretching your corporate limits, can lead to a possibility of failure. So plan your expansion well, then share with your team, mentor or any other experts you know.
10. Double-down on Strengths.
Study your strengths & weaknesses from every aspect. Do a SWAT analysis: Strengths, Weaknesses, Opportunities & Threats (ie, the competition). For instance, focus on your strengths as a leader, your team’s & the rest of your organization. What are the strengths of your team? What are your market opportunities? With these understandings, figure out ways to maximize these strengths. Then be objective and look at weakness. Which can you improve to give you competitive advantage in your market. This can help to ensure a growing profit margin.
11. Follow your “winning” Plan.
Wanting expansion is a sign of success, optimism, & desire for growth, in your business. Take some time to figure out the factors that led to the success of your business. Make it a point that they are followed in every expansion step – to continue to be successful. Stick to this winning plan, because it has proved to be successful and use it as your next expansion.
12. Leverage your Customer base.
One of the most helpful ways to ensure growth in your new expansion is by getting feedback from your customer base. After all, customer satisfaction is the key factor to business growth. They know your products and/or services. Request their feedback on any unmet desires, expectations, or wants. With this, you can understand what new features that need to be included with the expansion to delight current customers and attract new ones.
13. Consider your “risk-taking” Capabilities.
Before expanding your business, another vital point to keep in mind is your risk-taking capabilities. You must ask yourself the following questions: 1) Are you risking your current customer base with the expansion? 2) Do you have enough funds to back up in case of a loss – due to expansion? It is advisable to assess these questions and go ahead with the expansion ideas if you are positive, because taking risks often have their rewards.
14. ”Risk for Reward” Decisions.
What are the Categories of Risk?
- Strategic – because of market dynamics
- Financial – of spending too much with weak ROI
- Operational – it’s taking more resources than you estimated
- Reputational – will it lower your brand image on how your customers view you?
- Residual – unmitigated
- Other Risks – multiple (recession, political, natural disasters
Four step Process to evaluate & control
- Identify – all possibilities
- Assess – prioritize the likelihood & severity, then determine acceptable level
- Control – determine cause, then initiate corrective action to reduce or eliminate
- Monitor – your action, to determine if they are effective or modify
Evaluation Risk vs Reward
- Are the Risks worth the possible Rewards?
- What opportunities could the open up for you business?
- What could your wins be over the competition?
- Will it open up new markets, attract new customers?
- Will the cost of R&D be too high and not provide a good ROI?
- You’ll overcome your Fear of Failure
- You’ll probably see new opportunities you haven’t thought of before
- You break-thru the limits you imagine
- You often have to learn new skills – which have long term benefits
- Increase of Self-Confidence& Credibility
- Risks are opportunities to learn new things – that will benefit us in the future
- Challenges you to be more creative.
- Risks will test your passion and often fire it up
Bill Gates said: “We often learn more from our failures than from our successes”.
When expanding your business, you need to remember that you have to have a considerable investment, which requires a lot of cash. While the idea of a loan or debt may be convenient at first, in the long run, it may be challenging.
Make sure your business is stable – with good cash Flow – before considering expansion plans. Then you’ll be ready to go for the right opportunity and make your dream true in due time.
Comments: Any other Tips on how to Grow your Business?
from Startup Nation 6-22 enhanced by Peter/CXO Wiz4.biz
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