If your small business or startup is fortunate enough to thrive and survive the current economic landscape, maybe it’s time to take it to the next level. and consider expansion.
As with setting up your business in the first place, expansion comes with certain risks and rewards. Most management consultants will tell you that expansion is the point of no return, the state that absolutely necessitates doing the right things at the right times -- and where every small detail could spell ultimate success or disaster.
On the upside, it could be the best move you ever make. With expansion comes increased cash flow, more opportunities to build the company of your dreams and the chance to help others by generating jobs.
For SMEs and startups, here are some of the crucial steps in expanding your business.
Remember how taxing and challenging it was to research your business before you started? Expansion demands a similar effort. Start by seeking out the answers to these questions:
Why are you expanding?
What form will your expansion take?
How will this change your relationship with your consumers and prospective target markets?
Do you have access to a supplier/partner that can sustain your operations?
What are the possible barriers and challenges?
Business expansion often calls for more resources and financial investment. Research can help you review and contextualise your business in order to find out if you’re ready for expansion. Expansion is a an entirely different animal compared to starting up your business. While your previous experiences can certainly be beneficial in this endeavor, that alone cannot guarantee success.
If you haven’t patented or licensed your products/services yet, the best time to do it is before starting your expansion. As you move out from your local, small-scale operations, your business might come to the attention of ill-intentioned people. Ensure that you are complying with all relevant regulations and have the proper licenses and patents in place to protect yourself from this risk.
There are situations when business expansion means working with other people. From finding investors, pitching to bigger financiers, merging with another business or trying co-promotion, partnerships can help boost your business in many aspects. Financial upsides aside, partnerships can also be a great vehicle for learning experiences, marketing opportunities and other mutual benefits.
Open up new locations.
Opening up new locations is a common way to expand your business. In a sense, this is a soft restart in terms of moving to a new physical location and re-aligning with the consumer base in that location. This could entail many other changes and expenses in terms of logistics, operations and other functions.
Other businesses choose to diversify and enter new (or often parallel) markets where opportunities exist. Diversifying allows a business to explore multiple potential markets and create stability by having multiple sources of income. For businesses that are seasonal or trendy in nature, diversification can help fill gaps during off-seasons without completely pulling away from your original business.
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