6 Considerations for Expanding Your Small Business
Most businesses eventually come to the point where they must consider expanding. Of course, how you handle a business expansion can make the difference between long-term flourishing and failure. Trying to grow too soon can result in you not being able to meet increasing demand. On the other hand, neglecting to expand your business can lead to the competition claiming space in the market that you need. Innovation is changing the cause of industry but not the way of our life.
For any business expansion to be successful, there must be a strong foundation established. From establishing a legal structure to sound marketing strategies, Valery Taboh outlines six ways you can thoughtfully expand your business.
Set Up an LLC
The bigger your company gets, the more protection you need. If you haven’t set up an LLC yet, that should be one of the first steps you take in expansion. Operating under an LLC separates your business and personal entities so that your assets are protected against litigation. It’s a business structure that can flex as you grow, even if you take on partners or investors. Plus, it comes with tax advantages. You can learn how to start an LLC with the assistance of an online service; it’s cheaper than hiring a lawyer, and you won’t have to worry about overlooking any regulations. Not all formation services are equal, so check out the formation service’s ratings and reviews to ensure customers have been satisfied with the process and the outcome (a good example is ZenBusiness.com reviews).
Plan It Out
Without a plan, your business expansion is not likely to be successful. So, before you dive too deep into the process, create a thorough plan. Establish your goals, and lay out the steps you will take to expand the healthy way. Allow yourself a predetermined amount of time for the expansion so that you don’t take much longer than you should. And develop your target persona, as it will influence every facet of the development.
The planning phase -- and all consequent phases -- calls for utilizing proven project management techniques like Six Sigma and Agile methodologies. Quantifying your goals and establishing milestones allows you to measure success along the way and fix problem areas like production bottlenecks as you expand your business. What’s more, according to PMTips, project management will help define your resource capability and help you optimize it, which is important as you grow.
Research the Market
Business expansion only makes sense if there is a demand for your product or service in your market. An easy way to determine this is to assess your sales and delivery times. If you have garnered a waitlist, are consistently shipping out products late, or have overwhelming website traffic, it could be time to expand. However, you will also need to research the current and predicted trends in your market to get a more thorough picture of whether an expansion is necessary.
Keep Track of Your Cash Flow
Never sacrifice profit in the name of expansion. And since you will need to spend a significant amount of money on expanding, GrowthForce points out that it’s critical to maintain cash flow throughout the process. Otherwise, the expansion can quickly backfire and leave you in a worse position than you were before. Take small steps, and regularly assess your cash flow.
Set the Stage for Additional Staff
Expanding a business almost always involves hiring new staff. It’s critical to have the right kind of HR system in place so that you can quickly find the right workers and move your business forward. For instance, using a job platform makes the entire hiring experience go more smoothly by incorporating talent process automation, talent data insights, system migration, and more. And the long-term benefits far outweigh any upfront costs.
Adjust Your Marketing Strategy
Expanding also requires you to rethink your marketing strategy. Are you expanding to international markets? Your marketing will need to reflect that. Are you adding an online part of your business? You will need to determine how you can improve your website and social media presence. Are you expanding your product offerings? Make sure you consider your target audience when you’re crafting your marketing strategy.
If you think it’s time to expand your business, be sure to go about it the right way. Establish the appropriate legal structure, develop a thorough expansion plan, and conduct market research before you begin expanding. Make sure you maintain healthy cash flow at all times, use the right technology for hiring, and tailor your marketing strategy to meet the needs of any new markets. The more thoughtfully you approach expansion, the greater your chance of success.
Having trouble delivering improvement results for your business? Our clear Problem-Solving Path makes it easy for your teams to: achieve the greatest operational efficiency, identify needless steps and eliminate errors within processes, and improve your capabilities as a leader. Book a session with Agile consultant Valery Taboh today!
