So you think you are ready to expand your small business?
Your small business is operating smoothly, profits are streaming in and you’ve built a network of loyal customers for your brand. What’s your next move? It’s time to expand your small business.
If your small business is experiencing rapid growth, it’s important to get a strategy in place to appropriately scale your operations to adapt for the influx of demand. Without a good expansion plan in place, your company’s productivity will derail, and things could go south.
If you don’t compensate for rapid growth of your business, it will quickly become impossible to keep up with demand. Your business will lose out on a plethora of new customers who will simply flock to competitors who can fulfill their demands.
Here’s our guide on how to keep a firm grasp on your company’s increased workload so that you can successfully expand your small business and increase revenue.
Develop a Business Plan
This seems obvious, but most business owners simply assume that expanding a new business is just an extension of an existing business. That is a mistake many entrepreneurs make. Expansion failure is often due to poor planning…and can often be avoided.
If your business is planning on expanding operations into new territories, it’s crucial to develop a strategy that fits the structure of the new environment while staying in alignment with your company’s core objectives. Every market has nuances exclusive to that territory, whether cultural, political, or economic.
What sort of presence will you bring to the new market? It could be a branch, sales office, or a completely separate company. Regardless, you need to define goals for the short, medium, and long-term which will establish where your progress needs to be heading. Make a budget that handles the top-down annual expenses. And make sure your business has strict deadlines set to make sure your new-market entrance stays within time constraints and doesn’t lose out on potential new revenue.
Analyze new markets to see where your company stands
It’s imperative to conduct a full study on the impact your company will have on a new market, as well as how entering a new market will impact your business.
Analyze how well your business will perform within the new territory. Gather data that will help determine whether your business has a product or service that will garner demand. Consider a survey among the new market to get an idea of what consumers will be willing to buy.
Are local companies already satisfying those needs? There’s no bigger waste than entering a new territory with a product or service that already exists there and achieves the same goals. People won’t bother switching over when they already have something that works, so don’t waste your business’s time or money.
Lastly, figure out the market potential of the new territory. The new market needs to be optimal size or have potential opportunities in store. These factors can impact how long it will take for your business to reach sales goals within the new territory.
Revamp your hiring process
Every small business expansion means a need for more staff to run the operation. As a business leader, it’s important to focus on your long-term hiring in order to ensure a quality group of employees who have the company’s interests in mind. Keep your focus away from the current employee situation. While it’s important to keep up with the performance of your current workforce, your energy is better served focusing on new employees.
Unemployment printed a multi-decade’s low in May 2018. Will you be able to find the right employees? Will hiring workers to fit the job descriptions be as simple or more difficult? The workforce and talent-pool are constantly changing; don’t assume you can replicate your existing staff or culture with ease.
Start building a revamped hiring process to connect with ambitious employees that can bring growth to the table. Your new workforce should be supporting your company’s expansion and know how to use every resource as efficiently as possible. After all, when a business is faced with rapid growth, it must be as efficient as possible. Round up a group of high-achievers who will add to the company culture. This way, turnover will be minimized, and your business will effectively reach the maximum number of customers.
One of the most important ways to hit the ground running when expanding your operations is to assemble a Beachhead team. That is, hire a team of interim executives with a proven track record who can effectively handle a rapidly expanding company while you look for a permanent management lineup. This strategy is one of the most successful for handling business expansions, and was even used by Donald Trump as he transitioned into office.
Avoid moving existing executives of your company’s parent territory into the new marketplaces. This will drastically impact your existing business and decrease quality of service among existing customers. Additionally, do not rapidly assemble a local management team from the new territory. A lack of due diligence and patience could mean problems for the newly expanded business.
Don’t forget your existing customers
The rapid influx of new customers that comes with growth is exciting, but it’s important to be careful. Your existing customers should always be a priority. It can be easy to focus your attention on simply connecting with new customers, however your business will suffer if loyal customers feel neglected. Make sure to properly invest in retaining those who have already been supporting your brand. It’s been shown that returning customers are significantly more valuable than new customers.
Expanding your small business operations should include expanding customer service as a priority. Invest in growing your customer service department to handle increasing support needs and hire employees who will provide a personalized customer service experience. In return, your existing customers will be highly satisfied, which will result in them bringing in referrals and revenue increasing.
Make sure your product is ready to go
If you’re company is moving into new territories, make sure your product is ready from the second operations are moving. In order to do so, be sure there are no roadblocks that could delay your product from getting onto the floor.
- Compliance is key. Make sure your product complies with the local regulations, whether they’re specific to the industry or from the government.
- Localize your product. This is especially important if you plan to bring your business to a global scale. Different countries will require different translations, and it’s important to make sure your brand name will be recognizable in a new language.
Stay on top of your patent and trademarks. These can vary throughout different countries so make sure your product isn’t be copied.