Source – entrepreneur.com
From small acorns, great business can grow. But getting them there can be tough. That is why we’ve come up with this simple guide on the most crucial business expansion strategies you need to remember when going through the process of business expansion. Keep reading to find out what they are and how they can help your business expand and flourish.
Here are eight business expansion strategies:
1. Focus on current customers
When it comes to business expansion strategies most people are obsessed with gaining new customers and breaking into new markets. However, such obsessions can be dangerous because it ignores the business growth potential that focusing on retaining current customers can have. After all, it takes a great deal more money and resources to convert a new customer than it does to sell something to someone who has already decided to trust you and buy your products.
With this in mind, any expansion strategy should consider the profit that can be gained from marketing new products and deals to previous and current customers. One way in which to do this is to embrace cross-selling and up-selling. Cross-selling is where you market an additional item to a customer that they may also find useful. For example, offering them a deal on camping saucepans makes sense if you are selling camping stoves.
Upselling on the other hand is when you offer a higher priced item to a customer that is considering making a purchase. For example, instead of a gas plate for camp cooking, you can offer them a deal on an entire foldable camp kitchen that comes with multiple burners and space for storage and prep.
2. Create loyalty programs
You can also help your business expand by focusing on current customers by offering loyalty programs.
Such programs are designed to provide a reward to customers for using your business, something that helps them choose you over your competitors and so strengthen your business-customer relationship. Popular loyalty schemes include offering a free product after so many visits, or providing points with every purchase that can be exchanged for money off purchases. That’s why loyalty programs are one of the useful business expansion strategies.
3. Expand into new locations
Another vital factor to remember when expanding your business is moving into new locations. This can be done regionally, nationally or locally depending on your business goals and the demand for your products.
Of course, establishing this demand before investing a considerable amount of money in moving into new locations is crucial. Otherwise, you can end up spending a fortune for very little return.
Another factor to consider when expanding into new locations is whether your business’s infrastructure is robust enough to support such growth. For example, if you supply a physical product, you will need to ensure you have a robust delivery and order system as well as enough physical space to keep enough stock to fulfil the increased demand you can expect.
The good news is that you can use structures like these prefabricated steel & metal buildings to expand the space at your disposal quickly and cost-effectively. Indeed, prefabricated metal buildings can be made to order and then shipped out to any location in much less time than it takes to build a traditional brick-and-mortar building.
4. Consider a strategic partnership
When expanding your business, you may think that you need to go it alone, but nothing could be further from the truth. Joining up with another business in a strategic way can be one of the most profitable options when expanding.
Indeed business expansion strategies, and working with another business can provide you with access to a range of important things you’ll need to succeed from distribution networks to access to the right customers. Of course, if you team up with another business you’ll need to make sure that there is something in it for them too, which could mean a one-off fee or a share of your profits. Be sure to do the math carefully here and ensure that any partnership situation in which you find yourself is beneficial for your business.
5. Consider other types of business model
Another option for those businesses looking to expand is to consider using different types of business models. For example, ecommerce where stores sell things to customers online, is very popular right now. However, some business expansion strategies can successfully expand by offering subscription-based models where customers pay a set fee and get access to exclusive products or discounts each month.
Service and hospitality-based businesses like restaurants and coffee shops may also consider offering franchises. In this way, they can expand their reach, while also minimizing expansion costs and maximizing potential income.
6. Prioritize customer service
No matter what way you choose to expand, making customer service a priority is key. The reason customer service will always matter no matter how big your company gets is that it has a direct impact on so many factors including:
- Whether people buy from you
- Whether people leave you positive reviews
- Whether people recommend you to others
- Whether people end up becoming repeat customers.
Unfortunately, customer service can be the first thing that suffers when a business expands. This is often because companies do not account for the increased need for operational resources as they get bigger. For instance, while it’s important to increase the number of people you have available for direct customer service, your business will also need to ensure that you have enough resources to offer a good customer experience with short waiting times, and good communication throughout the buying process.
7. Expand your network
The adage that it’s ‘not what you know, but who you know’ stands firm when it comes to business expansion, as people and the connections they bring can mean the difference between success and failure.
The good news is that there are plenty of ways to expand your network as you expand your business. The first is to attend networking events in your field such as conferences and trade shows. The great thing about these is that they will provide a high concentration of people who are likely to be useful to you in your sector. Additionally, such events are set up to help people make connections with others so it can be a lot easier to meet the right people, even if you are not the most extroverted of people.
Another option is to hop onto social media and expand your network that way. Be warned though it’s rarely enough to just connect with or add people online. Instead what you are after is a genuine connection and the best way to forge this is to connect by offering the other person something of value. For example, offering a potential connection, some mentoring for their team, a way to solve a problem they are experiencing, or an introduction to someone in your network that they are looking to connect with can be much more effective than just introducing yourself.
8. Leverage data analytics
Last of all, if you truly want your business expansion strategies to be successful then you will need to build it on a solid foundation of data analytics. This means instead of just using your gut to make decisions you check the data and let that guide you.
This can be especially useful as people do not always behave in the way that we expect, and by making sure we adhere to the data we can better match the genuine needs and wants of customers. In turn, business expansion strategies will improve the experience that customers can expect when working with your business, helping to ensure they come back over and over again.
Types of data to look at when expanding a business include market research, competitor analysis, market penetration, and logistical data.
