Business Expansion Principles to Grow Effectively
Business expansion isn’t something that happens under the microscope. It is often a “learn as you go” experience. Sometimes it is chaotic with a few costly lessons of trial and error.
Business Expansion 101
The market offers plenty of opportunities for spontaneous growth. However, a reactionary approach isn’t built for the long term. Capturing seasonal rushes and influx is different than setting your business on a course to succeed regardless of what day it is on the calendar.
Mapping Your Business Expansion Strategy
Expanding your business can happen in a number of ways. You can specialize in serving a customer niche, maximize your product offerings, or add new services entirely. Careful with that last one if your business is relatively new — it’s easy to get distracted with too many offerings early on! If the demand warrants, you might also grow vertically by capturing new industries or pursue market opportunities to expansion by acquiring another business or partnership.
Ways to grow your business are endless, but you must achieve this without an unsustainable work schedule, high employee turnover, or creating a bad experience for your customers. Out-of-control growth can be worse for your business than no growth at all. Mapping your business expansion strategy means finding where easy opportunities lie in wait. Sometimes, as the owner, you are moving at such a rapid pace that simple ways of growing get overlooked. Creating a highly customized plan of attack is your first step, and that usually starts with getting a business valuation.
Turning Your Strategy into a Business Expansion Plan
A strategy begins when you are able to visualize all areas of your business and how they are working together. Growing smart includes minimizing any risk that scaling might present. If you are ready to define your exit, increase the value of your company, and improve the likelihood that it will sell for top dollar when you are ready to exit, you might consider turning to a proven scaling strategy.
One of the benefits of a business valuation is that a business owner can take a diagnostic approach to what is happening under the hood. They can see all aspects of a business's health, from which products and services hold the most potential, to hiring strategies, to achieving standardization across the business. Accelerating growth and increasing profitability comes from knowing what’s working for your business, and what’s not.
Destabilized or inconsistent cash flow is one of the common struggles we see business owners grapple with as they scale. Not having visibility on how much money is coming in or going out each month is a problem. Without a starting point, it’s hard to reach any goal in profitability. That’s where a business valuation comes in handy.
Executing Your Company Expansion Successfully
Business expansion strategy is all about learning how to go from the scrappy startup phase to building on a wider foundation of predictability. As your company grows, flexibility shrinks to accommodate for a more robust operation with the possibility of several teams or departments. This also introduces more complexity and risk to your business. There is a threat that teams become siloed, processes grow inconsistent, and miscommunication causes problems.
While the operations side of the business grows more demanding, this step will help you to counteract the small team framework you’ve outgrown and move toward a company expansion. Part of this process requires creating a set of standardized operating procedures for your business. Employees will be happier knowing what brand standards are (instead of following hearsay) and new employees will get the right guidance on how things are really done by your company. The risk of confusion in the scaling phase of a business is big, but with the right moves, you can counter the risk by being prepared.
Pleasing your most valuable subset of customers is an important step in company expansion. Knowing your ideal customer, what they want, and how to find more of them will help to make your business more profitable. It’s easy to get distracted by customer feedback for new and different types of products when the real opportunity is serving a niche. Specializing in something specific can be a form of business expansion, even if it doesn’t feel like you’re taking over a new market or doing anything groundbreaking. Focus counts for a lot in business when you know where your growth potential truly lies.
Risks of Expanding Your Business Too Soon
There are multiple risks of growth without a business expansion plan. One such risk includes getting too caught up in hiring staff and losing touch with your budget. Another mistake is not doing extensive product testing or research to see what need in the market your product meets, and how that market is expected to grow or shift in ten years’ time. There’s something to be said for jumping on an opportunity, but if it isn’t the right one, following an impulse can sink your business in the long term.
Conversely, some business owners are so obsessed with perfecting their product that they aren’t shipping it out fast enough. Putting things on the market has a way of offering immediate feedback and response, so sometimes it’s about identifying that minimum viable product, learning from mistakes, and using that model as a basis for improvement in production. Your customers can offer you the kind of insights that months of sitting around a table can’t solve for you. However, if the product is unusable or poor in quality, that can have the effect of driving away repeat business. A beta group of existing loyal customers works wonderfully for a new product launch, so consider some of these options before you roll out new services and products.
One last risk to watch out for when scaling your business is losing touch with the team’s experience. Are people complaining about too much work on their plate? Is your team working overtime and burning the candle at both ends? Scaling presents a threat that a few people are doing more and more work. But if it’s done at the right pace, new hires and added team members will help alleviate this stress and bring continuity of service.
Small Business Expansion Coaching from Coachwell!
Expanding your small business doesn’t need to feel overwhelming. There are business coaches at the ready to guide you through each step it takes! Ready to scale your business? We’re can help. In business, problems are interconnected. We deploy strategies that address root causes and offer long-term solutions to keep you on track. No band-aid solutions. That’s our promise.
