5 Tips for Healthy Expansion: Spread Your Wings without Spreading Yourself Thin
Expansion is a necessary part of business, but it is very difficult even for experienced entrepreneurs. Expansion requires you to risk the business that you’ve already safely developed on the chance that you might do better. Of course, you could also lose your entire business taking these kinds of risks. Expansion is very dangerous, so you should only attempt it when the conditions are right. In this post, we’ll tell you how to prepare your business to expand. The right preparation will minimize the risks and maximize the chance that you’ll see the results you want.
1. Create a Position of Security
You should not try to expand until you already have a stable business. Specifically, you should have reliable sales and a good supply of any products that you are selling. If you are selling services, you’ll want a strong amount of subscriptions. The ideal time to expand is when you already have enough in savings to handle any surprise problems with your business.
Of course, you may occasionally have to expand at inconvenient times. For example, you may need to expand when you see a competitor gaining ground on you. You may also have spotted an opportunity that won’t wait for much longer. If you must go ahead with an expansion before you’ve had a chance to get settled, you may find the next few tips more helpful.
2. Prioritize the Customers You Already Have
Make sure you can take care of the customers you have before you try to attract any new ones. If you alienate your older clients while expanding, you may lose so much business that expansion is no longer possible. You could also lose the clients that put you in the position to expand in the first place. Lose these clients, and the rest of your business may soon follow. There are several ways that you can make sure that your customers are cared for before you begin expanding.
If you do not think that you’ll be able to handle the customer support by yourself, make sure you make arrangements with someone else to handle the support. Also remember when you want to expand that the customers you already have are your safest bet for early sales. You already know that they will buy your products, so approaching them first can give you some of those crucial early sales. You current customers could also be a good test market for how your new products and services will perform.
3. Choose Options that Supplement Your Business
When you are expanding, you should focus on products that you understand in order to give yourself the best chance at success. The best way to do this is to focus on products like the ones that you already sell. For the best results, choose products or services that can be used alongside the products and services that you already offer. For example, if you sell home exercise equipment, you might want to consider expanding out to offer protein shake mixes and workout DVD’s.
This is an effective strategy because it offers you several benefits. First, selling similar items means you already have experience dealing with these types of products and services. You know what tactics are going to convince people to buy and you can probably sell them more effectively. Additionally, any marketing efforts you have set up to sell your original products can probably be extended to cover your new products and services.
4. Decide which Level of Risk Offers You the Best Return on Interest
When you feel you are ready to expand, you will likely have a lot of different options. There are plenty of directions that any business can go, but there will be consequences depending on the path that you choose. When you are deciding how you want to expand, you should always weigh the risks and rewards that come with each option.
For many entrepreneurs, the motto is “go big or go home”. People who say things like this tend to aim for the highest risks and the highest rewards. If this is your style, then you should try to stay on the cutting edge of technology. Try to sell items that have only just made it to the market. Of course, you may prefer a more cautious approach. There are plenty of safe ways to expand a business, such as: steadily increasing your marketing budget, being more proactive about finding new clients, and being more aggressive about pricing to attract more attention. We have seen for example that finding a cheap virtual office in London for London based business can reduce costs dramatically by testing out different locations in the city by renting a virtual office before signing up to a 6 month lease.
5. Do All of Your Homework
You should not expand until you understand everything there is to understand about your expansion. By know you should have steady customers you can rely on, and idea of what matches your business, and which risk is most likely to pay off in a big way. If you want to expand properly, you’ll still want to know a lot more than that.
Your research should include an in-depth examination of your new product or customer base. Specifically, you’ll want to know what the annual sales are, and who the people are that typically purchase these types of items. You’ll want to know where your next product is coming from, and what laws apply to it.
Finally, you should carefully consider the people who are already active in the niche that you are targeting with your expansion. Make sure you have the power to compete with the people who are already established. Picking the wrong fight could destroy your chances at expansion.
Best of Luck Expanding Your Business
Expanding your business can be very difficult, and you should only attempt it when you are sure that you can do it safely. Expanding is also a necessary part of doing business, and you won’t always get to choose the most convenient time. However you find yourself expanding, we wish you the best of luck bringing your business into the next stage.
About Simeon Howard
Simeon G Howard, born in Hampstead London, started his first business at age 21. By age 25, this serial entrepreneur had founded Your City Office Ltd, a Virtual Office and Office Space brokerage firm. Drawing from his past experiences, he and his partners have quickly built and developed one of the UKs leading organizations in this industry.