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10 Strategies for Advancing Your Business

Image of Michelle Farnsworth
Michelle Farnsworth

 

As an entrepreneur you have undoubtedly invested a great deal of money, time, and sweat equity just to get your business off the ground. You have successfully survived the all-too-stressful startup phase, and now you are wondering what you need to do to take your company to the next level.

The fact of the matter is, most businesses start small and stay there. So how can you jump above the others and successfully expand your small business? Though there are countless ways to do this, below are 10 of the best business growth strategies we’ve found that have been successfully implemented by other businesses.

1. Open up another location.

If you have already established a successful business in one location, why not opt to set up shop at an additional spot and reap the same exhilarating benefits? This idea is often what first comes to mind for so many entrepreneurs considering expansion. However, according to small business speaker, writer and consultant Frances McGuckin, “Physical expansion isn’t always the best growth answer without careful research, planning and number-planning.”

Before journeying down this road, ask yourself if your business is successful because of its location, or if there are more areas where profit may be possible. Also, ask yourself if your business could function optimally without you around. While this may seem like a strange question, you will be spending nearly all of your available time starting up a new location and so your old one must function optimally without you. You will need top-of-the-line administration and management teams in order to simply get your new location up and running, let alone productive.

The best thing to do before taking any concrete action is to do some in-depth market research. You need a firm understanding of what obstacles may present themselves as you move to a new geographical area. Build on the knowledge you have acquired about your current customers such as what their needs, desires or buying preferences are. Search out an area that has a similar customer base, whether it is in a neighboring city, state, or region. If there are not any competitors currently serving that area, this may be an ideal spot to open up shop.

Small business expert Frances McGuckin offers a few more tips for anyone considering location expansion:

  • Select a second location based on what is best for your business, not your wallet.
  • Study the economic and consumer trends for indications on your company’s staying power.
  • Make sure you are maintaining a steady bottom-line profit and that you have shown continuing growth over the past several years.
  • Determine how and where you will receive financing.
  • Develop a complete business plan for a new location.

2. Franchise your business.

If you have a lucrative business, and can develop a system that guarantees others can duplicate your same success, franchising may be your ticket to quickly growing your business.
Doing so will allow for growth without requiring you to be there personally to manage the new location.

Be aware that while it may be relatively quick to grow a business using this method, a franchise agreement can cost upwards of $100,000, so you must be prepared. You will be expected to be a top-notch mentor, extremely organized, willing and able to to travel, and fully capable of preparing the necessarily training manuals and tools that anyone can easily follow and carry out.

3. License your product.

Licensing may be a great option for you if you have a wonderful business idea but have reached your capacity for producing your product on a large scale. Licensing is where another company takes over the responsibility for producing and distributing your product, keeping the majority of the profits but paying you royalties. This is an effective, low-cost growth method, especially if you have a service product or branded product. You also minimize your risk by licensing and it is a lower cost to you in comparison with starting your own company to produce and sell your brand or product.

It is best to find a licensing partner that provides products or services comparable to yours. You will also need to find a competent attorney who specializes in intellectual property rights so that you and your company’s best interest is kept in mind as you dot your i’s and cross your t’s. This method certainly isn’t for everyone but many entrepreneurs have made prosperous businesses from licensing things like software, games, and designs, freeing their valuable time up to create new products.

4. Form a strategic alliance.

Another effective way to quickly expand your business is to align yourself with a similar type of business. This is a formal or semi-formal, ongoing agreement where you and another company agree to help each other in one way or another, thus forming a mutually beneficial relationship. This is a great way to expand your customer base and share success between two or more separate businesses without needing to contribute a considerable investment sum. However, many small businesses overlook this strategy out of fear of competition and choose to work solo. If you can find a business that does not directly compete with yours than it may be in the best interest of your company to partner up with them and pool your resources and customer base.

Such strategic alliances are a great way to maintain your independence while still joining with another for mutual gain. Studies show businesses that participate in alliances grow faster, increase productivity quicker and report higher revenues than those who abstain. Alliances are also a great way to test the waters before a full-scale merger since it is easy to back out at this point or participate in several at once.

Here are a few suggestions to help you find the best matched alliance for your business:

  • Determine exactly what traits your ally needs before looking for one. Plan first, choose later.
  • The best spot to find an ally is among customers, suppliers, competitors and other professional associates. Networking is crucial here!
  • Follow your instincts. Check and double-check a potential ally’s credit rating, financial report and industry reputation, but make sure to follow your gut as you make that final decision.
  • Make sure the sum of you and your ally together is greater than what you could be alone, otherwise it may not be worth making an alliance.
  • Set precise goals so both parties know exactly what they expect and hope to gain from the formed business friendship.
  • Frankly communicate expectations and decide what and when each party will invest, as well as expected returns and how any disputes will be resolved. Make sure these points make their way into a legal document.
  • Just as important as forming an alliance is knowing how to end one. It is a dangerous mistake not to create a comprehensive plan for ending the alliance.

5. Diversify, diversify, diversify.

If people are already buying a product or service from you, there is huge potential found in offering them a go along item that they might need or want. It is crucial for continuing business growth that you avoid the trap of providing one, and only one, product or service. What are some new and different ways you can serve your customers? Are there any logical extensions of what you currently offer? By branching out, you will preserve your existing customer base and create multiple income streams that can often fill seasonal lows and increase sales and profit margins. Take a look at your primary product or service and brainstorm ways you can add additional low-cost options.

Another way to diversify is by tweaking an already existing product or service so that it appeals to an entirely new group of consumers. Same product, new variation for a different audience. Try examining how your customers’ needs have changed over the past several years and consider changing your offer by tweaking its current features to match consumers evolution or giving your product a complete overhaul in order to draw more interest from loyal customers (as well as attract new ones altogether). Other common ways to diversify include teaching classes, importing and/or exporting yours or another’s products, and becoming a paid speaker or columnist.

6. Target additional markets.

The market you are currently in is serving you well, but there may be others. If you are selling to teenagers, try marketing to college students. If you sell to single moms, maybe your product will also work for single fathers or married mothers with a few minor modifications. The possibilities are endless!

This could also mean targeting a new area or country while still focusing on the same population you have always been. Whether you choose to broaden your market by location or population, one thing is certain – you must first do your research! Just as we mentioned before, you need to understand the wants and needs of your new market and then develop a relevant product or service that meets these requirements. You cannot just presume that a new population or region will behave identical to your current market customers.

7. Gain a contract with the government.

A great, yet often overlooked way to grow a business is to get a contract with the government. With a portion of government budget being award to contracts with small and medium-sized businesses, there has never been a better time to explore the opportunities accessible to you in this new market.

You can determine the types of contracts available to you as you work with your local Small Business Association (SBA) and Small Business Development Center (SBDC) offices, as well as your local, regional or state Economic Development Agency. The U.S. Chamber of Commerce and the SBA also have a Business Matchmaking Program designed to match entrepreneurs with buyer as well as provide strategies to grow your business.

Though this method requires a great deal of effort upfront, it will be worth it in the end. Once you have jumped through those hoops to gain a government contract, you are typically not subject to the same high level of outside competition that is found in other marketplaces.

8. Join forces with another business.

Another great way to advance your business is to join forces with another business. Two is always better than one, and partnering with a company in a similar industry is one of the most inexpensive and simplest forms of marketing you can utilize. For example, if you sell health supplements you may be able to get a local health club to sell your product in their store by giving a discount to their members. On the flip side, you can also give a free, one-day gym pass to anyone who purchases their supplements from you. Through such collaboration you will be able to join the skills and experience of your business with those of a complementary business that has a similar customer base as you do.

If teaming up with a similar company doesn’t necessarily seem to be the direction you want to go, then perhaps acquiring one is. In an acquisition, a company purchases another company to broaden its own operations. This is one of the most aggressive means to growth and expansion out there, and is also one of the primary reasons a lot of top businesses successfully grow because it guarantees an increased market share and can also create accelerated growth. A small business may employ this strategy over another in order to expand its product line and enter new markets, which is not as risky as a diversification strategy because products and markets acquired through this means are already established.

Before heading down this wonderfully appealing road, you must first understand that acquisitions are tough! A company must know exactly what it wants to achieve when using this strategy because it is such a significant investment (of time, legalities, and money) to purchase and implement. One poor investment could easily remove any financial security you may have felt right from underneath you. Keep a specific list of attributes you are looking for in an acquisition and then guard it with your life. Do not allow emotions or egos to have more sway than these characteristics you have established. You are the expert and you know what a good buy is in your industry. Stick to it. And do not buy what you simply cannot afford. You may not be able to purchase the very best in the industry, but you will be able to afford something, especially if it’s a company that has room for improvements.

So whether by joining forces through partnership or acquisition, you can increase awareness of your brand with customers in your target market that may never have heard of you otherwise.

9. Spread globally.

At a recent international trade symposium held in Washington D.C., Sandy Baruah of the Small Business Administration emphasized that today’s global markets present both challenges and opportunities: “In the global economy of the 21st century, our competition is not just the firm down the road. Our competition comes from anyone in any corner of the globe with a good idea, a good education and a good internet connection.”

The largest reason to go global is, of course, to improve your business potential for expansion and growth. You can extend the sales life of an existing product or service simply by finding new markets abroad to sell them in. Higher sales and possible lower production costs are also other great benefits for global expansion. There are many ways to go about spreading elsewhere, such as through exporting, licensing, a joint venture or even via manufacturing. There are also many locations – from Canada to Mexico or across the ocean to Japan – the possibilities are as endless as spinning a globe.

Doing business abroad is going to be different, much different, than it is back in your backyard. Below are six basic guidelines to help you in your pursuit of going global:

  1. Begin your global expansion by creating an international business plan to evaluate what your needs are and establish your goals for growth. Before actually moving forward, you must assess your readiness and commitment.
  2. Gather foreign market research by utilizing the Department of Commerce’s wealth of information on foreign markets for U.S. goods and services. This will help you identify markets that may be best suitable for what your business has to offer. Is your target area familiar with your product or service? Will it sell well in the targeted culture? Just because it sold well in the U.S. does not guarantee it will have the same success across borders.
  3. Assess methods of distributing your product abroad, and then select the one that fits best and makes the most sense for your business.
  4. Learn how to establish prices, negotiate deals, and navigate the new cultural, social, legal, and economic differences that make exporting a challenge for those who have only operated under United States regulations. Do you feel comfortable in this new country? What is their infrastructure like?
  5. Make sure you are getting paid by utilizing financing from both government and private sources. With centuries of financial innovations and a real interest from the government in boosting exporting has made getting money simple. One of the most popular sources of financing for overseas business expansion is the Export-Import Bank of the United States, which has helped finance sales of more than $300 billion in U.S. goods overs since 1934.
  6. Once you move your goods over to their international market, take great care to package and label them in accordance with their unique market regulations. Although there has been a globalization of transportation systems, there are still requirements in place that change from one location to another. Check and double-check that you are perfectly in accordance with them.

10. Expand online.

The world wide web offers businesses a very cost-effective way of expanding their scope. Options such as selling products online in order to increase geographical customer reach or making your product available to customers around the world 24 hours a days 7 days a week are all the appeal of the 21st century.

Even if you cannot specifically sell your product or service online via shipment, you can still market your business there. Promote yourself. Oftentimes customers discover a business through an online search engine – in fact over 80% of traffic comes from them. Make sure your business has an online presence and that your website is an accurate representation of what your business is in order to maximize your exposure. Bill Gates himself said that by the end of 2002, 15 years ago, that there will be only two kinds of businesses: those with an Internet presence, and those with no business at all. Just imagine how much greater this need for a professional online presence is over a decade and a half after he said this statement.

Make certain that you fully utilize online mediums such as Twitter and Facebook to help you draw and maintain customers. Social media is quickly becoming the top way to promote many businesses. Weekly newsletters via email are also a fantastic way to get your name out and in front of new and potential clients. Whether you are directly selling or ingeniously advertising, expanding online is one of the very best ways to advance your business.

It is easy to feel overwhelmed and uncertain of what path to choose after going over these 10 ideas. Start by choosing one or two strategies that are appropriate for your business type and current circumstances and then get moving from there. Selecting the best one will depend on the type of business you own, the resources you have available, as well as how much of those resources, time, and money you are willing to put forth and invest. But no matter where you start, or how big or small it may be, don’t give up. Keep trying and you will see remarkable progress.


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