TOP 15 EXPANSION STRATEGIES FOR YOUR BUSINESS GROWTH
After the buzz of launching your very own business has worn off and you’ve been plodding along for a while, you may find that while everything is going great your business has reached a plateau and is no longer growing.
If you’re concerned about being left in a position for a long time, you may be looking for ways that you can scale up your business to achieve greater success. You can also do this to get a larger share of the market.
Deciding how to expand your business can be tricky. After all, a company that is consistently performing well is something many people desire.
The question in the heart of every business owner is how will my business thrive or how will my business grow to get more income in the seemingly tough economy?
Hence, it’s vital to think very carefully about how you can expand your business without sacrificing your current successes.
If you have been running your business for a while now and it is going pretty well, you might want to grow it further. Read on for some expansion strategies and ideas that may help you to do just that.
1. Do a deep survey of your product and services market target
You should do this by making a survey of those you would like to sell your market to and at what cost.
This cost should be one that your market target can afford and buy on average. You need to find out if there is a local market around that provides the same products or services which you are willing to offer.
Know if the people are really satisfied with those products and services, then you can develop a better version even if it’s limited edition. Find the gap and take advantage of it.
However, in the midst of all these, you must consider your target market size, and how long it will take for you to capture the whole market.
2. Form an alliance
This is another way of expanding your business, and it could be a powerfully quick one.
By joining and aligning yourself with a company that offers a service for your products or one with a similar type of your business, it will help you develop your products and form an alliance within your business industry.
You should form an alliance with a business that already has a good record of customers.
However, you should bear in mind that you would not be able to get all the profit you should be getting from offering your service or selling your products, because, alliance comes with you paying a commission to the business you are in alliance with.
Moreso, you could be the one getting the commission, if you are the one selling the service or products of the other business.
So, if a person with another business comes with a proposal of alliance with your business, you should accept it. It will make your business a success in a quick way.
3. Win a government contract
This is one of the best expansion strategies you need to enlarge your business. Yes, you can have the government as your customer.
Make a wide research on how you could offer the Government your products and services. Acquiring this contract could be strenuous and might require that you are patient.
You will likely require a proposal which would pass through a few departments before it is finally approved.
The beauty of winning a government contract for your business is, once you are in, having to compete with other people running your kind of business in the market place becomes easy.
The idea of going through the process of submitting your business proposals, the scrutiny by the government officials and the process of your proposal being approved could be a discouraging one.
However, once you have surmounted those hitches successfully, then you are in for the long term stability of your business depending on the years of the contract made.
4. Upgrade Your Equipment
Giving your equipment an upgrade can be an excellent way to increase your business’ capabilities.
Investing in some additional equipment, or the latest technology may help you to provide some services. This could be services that your competitors are unable to offer.
For example, you may decide to introduce new CNC machinery into your factory to automate new processes.
5. Bigger Business Premises
Your current plans for expansion might be limited by the available space in your current business premises. At that point, you may want to look around for alternative sites for your company.
Bigger premises may enable you to bid for more significant contracts. It may also enable you to work with clients that you previously only aspired to work with.
Alternatively, you may find that you need second business premises rather than a single larger one. The second premises could handle separate parts of your work.
While some people love to network others absolutely detest it. Nevertheless, there’s no doubt that it can be a useful activity.
Meeting with other business people from either your local area or those that run businesses in your industry can be really beneficial.
Not only will you get to obtain further insight into the latest developments taking place in the business community, but you will be able to represent your business and increase its visibility.
There’s never any harm in increasing your number of business contacts. Who knows you may just win some new business from it.
7. Incorporate new products & services to your existing business
As relatively easy this may seem, there are a lot of things to do to accomplish this.
First, you would need to know what products and services your customers want and if they will be willing to pay for it, and at what cost. The next thing to consider is profit. Do you think it will be profitable?
It might not be small, but, you cannot afford to run at loss at the expense of satisfying your customers.
You should also inquire from your customers to know what they think of your idea of adding new products and services, and the price they could pay for it.
Put into consideration your cost of manufacturing, delivering and selling the products or offering the services. Then, if the above gives you positive responses, you really need to go for it.
8. Consider new sales and delivery channels
If you still sell and deliver your goods and services manually, you might want to consider engaging the internet in selling and delivering your goods and services. This will give you a form of expansion.
Bill Gates said, “by the end of 2002 there will be only two kinds of businesses: those with an Internet presence, and those with no business at all.”
Reason for this is, the internet has a way of expanding business within a short period of time. You would be able to reach out to a larger number of people within a short time. Therefore, you should maximize the internet in selling your goods and services.
Another thing to note while moving to the internet is your design and programming. They are of utmost importance, as it is your content that will draw a visitor into your site and get them to stay or buy.
9. Make your business a franchise
Franchising your business is a good vehicle for the expansion of your business.
This is a system that allows your business to operate outside your local home territory. It involves streamlining your internal systems which help you market your products and services easily.
You could also sign your business with international broker firms for more expansion.
You can also choose to grow globally.
How do you get to customers in other countries when you have no one there?
Well, you do not really need to have someone there, but you could research and check for companies that would be interested in helping to sell your products in their local markets.
This actually means you’ll take extra care in getting yourself involved with people that have integrity, or else you would run at loss.
You could start from countries that are easy to penetrate or get into, then you move into other countries and gradually your business will expand globally.
It is worthy to note that you do not have to acquire another business to expand globally, you just need to channel your business’ products and services into an international market.
10. Horizontal and Vertical Integration
Horizontal integration is one of the expansion strategies that allow you to increase your production in the same part of the supply chain, that is, you get to expand your business internally.
This strategy will help your business increase in size and make you diversify the products your business offers. It also has a way of reducing competition whilst expanding into new markets.
Vertical integration, on the other hand, helps you control more than one stage of the supply chain. It helps your business reduce costs across the various parts of your production & guarantees a tighter control on the quality of the products and services.
This type of integration also assures you of a better flow of information across your supply chain, and it makes controlling the information easy.
You will be able to take charge of the other part of the supplies your business is involved in.
For instance, a company that produces bread could integrate the production of the plastic bag used in packaging the bread, instead of buying it from another company.
That way, you would be saving the cost of having to buy. Also, you could get to supply to other companies who make use of that kind of plastic bag for packaging their products as well.
Hence, vertical integration helps you run a wider and effective production and supply chain.
11. License your product
Licensing your product is an effective way of running a business with a growth medium at a relatively low cost.
This is achievable by finding a company that will be your licensing partner, as this will help you receive upfront monies from a continuous sale of your products or software.
However, before licensing your products and services to any company, ensure that you get a very competent attorney who is a specialist in intellectual property rights.
That way, you would be reducing the risk of losing control over your own products and services.
Diversifying is an excellent growth strategy. It allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins,” says McGuckin.
He diversified from an accounting, tax and consulting business to speaking, writing and publishing.
Irrespective of the kind of business you run, you would still be able to diversify your products and services. This is having a side income asides your main business, which could be another form of offering the service of your business.
For example, a person who is into a baking business, could sell instruments used for baking or do pieces of training for people within and outside their local communities.
So, there are several ways to diversify. You just have to find out what works for you and go for it. This will help you reach out to a larger audience and increase your presence in the market.
Diversifying your business will help you achieve a broader range of services or products which complement your existing business.
Care should be taken when diversifying. If you don’t want to harm your existing business, don’t take your eye off the ball or let your quality slip.
13. Sell more products and services to your existing customers
This is another strategy to expand your business.
How will you do this?
You need to penetrate deeper into the base of your current customers, that is, make a market segmentation analysis of those who already buy your products and services, and those who are not yet willing to patronize you.
After this has been done, focus on those that haven’t patronized you, streamline your criteria to their location, age, gender, wealth status etc. Then allocate your sales and markets to them.
If you are introducing a new product in that sector, these are the guys that will likely patronize you.
14. Move into new territories
There are new territories that will be willing to buy your products and services which you aren’t aware of.
To do this, you might have to open your market in new territories to market your goods and services. This could be within or across your current town, within or across your country.
However, before taking this step, ensure that people in that territory are willing to pay for your products and services. Once predetermined, you can go ahead and establish your business in that area.
It is worthy to note that you will be making a significant investment of both your time and money. You might have to do a lot of advertising to capture the attention of people in that area.
15. Joint ventures
This involves making an arrangement to join your business with another company. It could be two, three or more. You all agree to join resources together with the purpose of accomplishing a specific task.
This common task may be a new business or project and it can also be an existing business. For instance, a company that is into bag production can have a joint venture with a company that produces footwear.
This is an easy one because the two companies have a similar target market and raw material for production.
Furthermore, you must involve a competent lawyer, who will issue a binding document of agreement. This will help you to avoid disparity between the companies.
You might feel that your business needs to grow in order to be sustainable.
However, sometimes it may seem that there is no way to expand your current business any further. Especially with the range of products or services that it offers.
The truth is, your business venture has every chance to grow and expand. Regardless of the prevailing situation, if the above tips are adhered to, your business will sprout.
I have provided you with 15 options you can ride with. The first step starts with you – you need to always see an opportunity for growth.
Which of the expansion strategies resonates with you the most? Tell me. 😉