The tips explained in the following topics can be applied by businesses of any size and type, but they are intended for businesses that still have plenty of room to grow in their markets.
- Study The Market
The first step is to question the feasibility of expansion. You certainly already know your industry very well. Still, doing a market analysis is necessary to avoid risks, be more assertive and increase sales.
This study consists of verifying different aspects of the sector in which the company operates, such as:
- whether impactful transformations will occur in it
- what are the trends and technologies that could impact you
- expectations about its future, such as the growth of the field of activity
- what the customers’ current behavior is and whether they will change over time
For example, suppose an external event or the emergence of disruptive technology will change many aspects of the industry. In that case, you will need to invest in adapting your business before working on its expansion. This happened with the emergence of Uber, for example, which made urban mobility businesses need to innovate and create differentials to remain competitive.
- Do An Internal Analysis
After studying the external factors, it’s time to look inside your company. The average profit over the last three years is an issue that should be overseen, as it indicates the organization’s financial stability.
In addition, you also need to assess whether the company has sufficient structure for expansion, such as, for example, the volume of inventory, personnel, and support. An ERP system can help in decision making, as it provides essential data that will help manage your venture.
Another important aspect related to ERP that impacts the internal analysis is the creation of scalability, which is the ability to increase your sales, operations, number of stores, and other factors without increasing costs in the same proportion
- Choose An Expansion Model
After this analysis, it is time to decide how to expand your business. There are many ways you can increase your company’s sales, including:
opening a branch: this is often the first option that comes to mind, but it should be carefully considered. It is essential that the company has a consistent profit and has been showing steady growth over the last few years;
Set up a franchise system: if your brand is well established, a good alternative is to expand through franchising. So, you don’t assume the investment expenses;
Licensing your product: Selling the license to manufacture your product can be a good way to increase profits. It is an alternative to the franchise system, as it exempts you from extra costs and you profit from the royalties paid by the associates;
acquire or merge with another company: buying or merging with another company is a good way to gain market share and increase your reach. However, this is an investment that should be carefully evaluated;
set up e-commerce: expanding your business to the virtual environment is a simple, quick, and economical way to increase sales.
There are several tools from Field Service Management software for home services for example and resources to make this project viable, but be aware, while these expansion models are more practical, they also require good planning!
- Carry Out Strategic Planning
Growing a business is almost like starting a new venture — the difference is that you now have more baggage.
Therefore, strategic planning is essential for your expansion to succeed. Updating your business plan is also an important action in this process, as is creating a good marketing plan and financial projection for your company.