To reach your full potential as a business owner, expansion should certainly be part of your long term strategies. If businesses didn’t expand, the world would be a very different place indeed. Apple, for example, may have never moved out of Steve Job’s parents’ garage. As a result, we may have never got the smartphone. Even the personal computer may have not caught on like it did.
Overall, unless you are absolutely satisfied with what you have now, you should start drafting expansion plans that can be acted upon in the future that can allow your business grow in a natural matter. Still, there are many pitfalls you must be wise enough to avoid. Below are just a few you should be aware of.
Not Truly Understanding Your Customers
Overall, expansion will really only succeed for a business if you have a firm grasp on who your customer is and why he or she buys your products and services. To achieve a better understanding, you need to collect actual data from the customers you do have. This research can then be utilized to help your company achieve a logical and successful expansion. If you know what your average customer expects from your products and services, you’ll be able to better apply that knowledge to larger numbers and wider swaths of geography.
Not Understanding Other Markets
Expansion often includes expansion into new markets. However, just because you understand how your current location does business in your neighborhood does not mean that you can apply those assumptions to other markets.
For example, new locations may have to deal with fiercer competitors that really have no effect on your original store. If you run a fast food burger franchise, certain markets may be so saturated with competitors that gaining a foothold would require a miracle. This is part of the reason why businesses spend $44.3 billion on market research annually.
Not Creating Actionable Plans and Timelines
Many business expansions failed because they were done without proper planning. A lot of planning needs to go into an expansion project. You should start this planning not only months in advance but perhaps years in advance. Part of this process is certainly creating plans and timelines that can be acted upon. While you don’t want to become handcuffed to a plan after different variables change, it is still important to have one. Just make adjustments as needed.
Not Developing the Business Relationships Required
A business expansion isn’t something that only exists as a plan. It is something that needs to be made into reality. To do this, many different business relationships need to be formed.
If you are expanding into Seattle, this includes developing relationships with the local government to gain the zoning permits needed. You’ll need relationships with building contractors such as a crane for hire Seattle company. You will need to develop relationships with local radio stations, newspapers and even mass transit systems so they can carry your advertisements. All of this needs to be done ahead of time to make sure to the expansion process runs smoothly.
Not Developing the Right Talent in Anticipation
Expansion requires hiring more people. However, do you have the resources to find the right talent you need? You should focus on this early. People that you hire right before an opening may not have the skills and perception of the business you need to replicate your success.
You should certainly consider developing talent from within that can help to manage new locations and aspects of your business. As the business owner, you won’t be able to oversee everything simultaneously. You need to delegate responsibility. About 26 percent of open positions are filled internally.
Expansion can allow your business to grow into a humongous company with national and even international reach. However, history is littered with plenty of disastrous attempts at business expansions. Avoid problems by putting in the proper amount of planning and research.
by: Dennis Hung