Written by: Marjorie McMillian
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After a few years of running a profitable company, you’re ready to expand. You have a loyal customer base, a strong team, and more demand than you can handle. What is the best way to expand your business and what should you consider as you prepare for rapid growth? Let these tips guide your business’s growth.
3 ways to expand a business
There are multiple ways to grow business revenue. Choose one or two of these strategies to guide your company’s expansion.
Add new offerings
Companies add new products or services when they want to sell more to existing customers or target new customer segments. Use customer feedback, market trends, and customer research to identify new product opportunities that both complement and diversify your current offerings.
After defining a new product strategy, the next step is getting teams and stakeholders on the same page. Consider using a product roadmap as a living document that outlines the steps and timeline for a new product’s release. In addition to uniting teams behind a shared vision, a product roadmap clarifies responsibilities and expectations and provides a centralized space for discussion.
Expand into new locations
Expanding into new locations lets you target more of the same type of customer. Expansion can be geographic, like opening an office in a new city or state. Businesses can also expand digitally with e-commerce. When choosing the ideal site for expansion, consider customer analytics, competition, and proximity to your existing business.
Standardization is critical when opening a new location. Business process standardization establishes a uniform way of doing things so you can duplicate your company’s success across multiple locations. Work with stakeholders to document the inputs, outputs, and tasks involved in key business processes and develop flowcharts to diagram processes and eliminate ambiguity.
Expand into a new market
Growing your market share doesn’t necessarily require a major capital investment. You may be able to expand by targeting new customer segments in the same geographic area using the products and services you already sell. Perform market research to identify new customer segments that might be interested in your product and develop a value proposition that reflects the needs of your new customer.
Once you understand your target segment, next comes developing buyer personas and adapting your messaging, imagery, packaging, and product design. Decide if you’ll refresh your current brand identity to be more inclusive or expand your brand’s architecture with a sub-brand, endorsed brand, or individual product brand. Sub-brands and endorsed brands build off a company’s reputation while individual product brands stand on their own.
Key considerations when expanding your business
What else should you consider when growing your business? No matter which expansion strategy you choose, it’s important to do your due diligence first.
● Cash flow: Can your cash flow meet the demands of your expansion strategy? Develop budgets and sales projections to understand your cash flow and financing needs.
● Invoicing: An invoice management system allows you to create and email invoices to your customers. Your customers have the ability to pay you through the invoice which gets you paid faster and boosts cash flow.
● Labor: Don’t forget to factor in the expense of hiring more employees as your business grows. Research labor costs and supply before opening a new location to ensure you have the talent to support expansion.
● Taxes: Making a sale in a new location affects tax responsibilities even when the sale occurs online. Familiarize yourself with tax rates and rules in each location where you do business and explore solutions to automate sales tax compliance.
● Scalability: It’s important to choose software that grows with your business. Scalable software should be cloud-based, intuitive, and integrate with other business systems.
● Logistics: With more sales comes more inventory to replenish, product to store, and orders to fulfill. Make sure you’re prepared to handle the additional volume or outsource to fulfillment.
It’s not enough to have the demand. For successful and sustainable growth, your business needs a strategy. Research your market and industry trends to determine the best expansion strategy for your brand and start laying the groundwork to scale your business. With a strong business plan and dedicated team, you can achieve your growth objectives and take your business to new heights.