Business expansion requires three things to be successful: Capital, knowledge and networking. Additionally, you may want to seek advisers to help avoid the pitfalls of expanding a business because it can be risky to expand if you are not ready. Expansion is about the amount of time you are willing to invest in growth.
Tip #1 Get Financing
Before attempting to expand, always make sure the you have financing lined up. It is a waste of money to expand and be stopped halfway through because you ran out of funding. One of the best places to receive financing is AFN. This company makes it easy to get financing for small-sized to medium-sized businesses. You will not be asked to submit to a credit check.
Tip #2 Diversify
Selling complementary products or services helps provide a greater range of services to earn more money. McGuckin, a small business consultant, once said that diversifying is a marvelous growth strategy that gives you multiple streams of income to fill in for low seasons. Also, it can increase the sales and profit margin. Connecticut entrepreneurs Rebecca Cutler and Jennifer Krane said that once they established a loyal customer base, they broadened their product range to include raising a racquet yoga and raising a racquet golf.
Tip #3 Government Contracts
Representative Nydia M. Velazquez said that the best way for small businesses to expand is by seeking the government for a customer. The U.S. government buys the most goods and services in the world. They buy more than $100 billion worth of goods and services every year. You can work with your local SBA or SBDC offices to determine the contracts available. SBA has a Business Matchmaking Program designed to help entrepreneurs find buyers.
Tip #4 Acquire Another Business
Mark Fasciano founded FatWire in 1996. Mark could not have predicted what would happen a few years later. As the tech market hit a huge slump, the company focused on survival and helping their current clients. However, they kept their eyes peeled for economic growth opportunities, and when they bought the bankrupt company divine Inc., they created an integration of the two companies. Mark met 45 new clients globally within the first six months. The expansion was a complete success, and they retained 95 percent of the customers from divine Inc.
Fasciano says focusing is one of the most important factors when expanding businesses. FatWire brought focus to some of the neglected products of divine Inc., and the customer base grew from 50 to 400.
Tip #5 Use the Internet
The Internet has the terrific advantage of reaching customers globally from one place. It does not require nearly the amount of money that a physical location requires, and it allows even small businesses to reach a worldwide customer base. When setting up a website, you should remember to focus on good design and programming. You want to make your services as easy to buy as possible. Also, a good website gives you insight into your target audience, and how to assist them.
Tip #6 Marketing Your Business
You might have a top-grade product, but if no one knows it exists, you will have a hard time growing your market share. Big companies invest millions of dollars into advertisement every year because it gets their name out there, and people buy more from them.
Provided you have done your research, expanding your business leads to an increased profit margin. However, you need to have a plan for expansion. You will have the easiest time expanding if you enter a new market with your current business. It is better not to attempt to build a new business from the ground up.