Successful business growth doesn’t happen accidentally. While there are times when rapid expansion occurs due to unforeseen factors such as large-scale market changes or shifts in demographics, for the most part, a business plans for expansion long before actual growth takes place. This planning helps anticipate potential challenges and roadblocks, as well as define growth opportunities—all so expansion takes place in a hopefully ordered and effective manner.
Here are tips on planning for expansion that can help inform your strategy:
Know why your business should expand. A key step in the planning process is “to define exactly why you want to want or need to expand,” notes Tweak Your Biz. This initial step sets the tone and pace of your plan, “so take time to do a thorough explanation, in writing, as to the purpose of your expansion.”
Incorporate expansion into your marketing plan. An effective marketing plan addresses all aspects of potential growth, from target audience research to the funds needed to meet your expansion objectives.
As we’ve noted previously, a solid marketing plan “combines an in-depth knowledge of your target audience with a comprehensive competitive analysis of the marketplace.” With this information, you and your company will have “a keener grasp of what expansion costs will look like over a set period of time.”
Consider a new product launch or product upgrade. For many businesses, the most obvious path to successful growth lies in expansion of their product offerings. Opportunities for growth in this area include:
- Upgrade your existing product list.
- Launch a new product.
- Boost sales of existing products to current customers.
- Identify and explore untried customer markets.
In the all-important planning stage, notes AllBusiness, market research should be conducted with “a focus on customer demand for new products and services and your cost to manufacture, deliver, and sell them.” Unsure what the new product should look like? Ask your existing customers for input on “your new product and service ideas, including potential price points.”
Carefully outline prospective hiring needs. With expansion often comes the need for a larger workforce (and with that, of course, comes additional labor costs). Do you anticipate bringing on additional full-time staff in 2019 or will added part-time workers fit the bill? What about outsourcing some of the administrative tasks engendered by business growth? As part of the planning process, look at ways to meet your expansion goals without incurring unnecessary additional expenses related to payroll, healthcare and other legally mandated benefits.
Explore new funding sources. Since we’re talking about money, your plan for growth must cover potential sources for financing. Options for small businesses range from loans and financial programs offered by the U.S. Small Business Administration to funding available from banks and credit unions. Also, specialized online lenders can help with key capital loans and other funding needs.
Your detailed plan for expansion will come in handy when you make your case for a business loan.
Talk to your peers about growing the business. A few months of healthy profits can make even the most cautious business owner eager to expand into new territories. But it’s always a good idea to discuss these goals with others in your business network or with members of a seasoned business advisory peer group. “A strategic plan combined with a peer review board is the guiding compass for any business looking to get and keep a competitive edge,” particularly when it comes to business expansion.
Want to learn more about how to plan for expansion? Download our free TAB white paper, “Best Ways to Secure Capital for Your Business,” for an in-depth look at the best funding options out there.