After surviving the startup phase and successfully building a small business, your energy and focus will likely shift to expanding your business. Knowing what the next step in growing your business and expanding beyond its current status is paramount. Consider the following five small business expansion tips that will help you take your business to the next level.
- Gather Market Research
Market research is the foundation for many successful business’ growth strategies. Thorough research allows you to make informed sales and service decisions and influences marketing strategy and advertising budgets, among many other things. Some businesses choose to operate off “gut” feelings and best guesses. While they may experience some success, smart market research provides your business with the information it needs for strategic expansion and long-term success.
Market research is fairly complex. The best approach is to choose an area to focus your research that provides deep insights into specific parts of your market and your business. The primary source will come directly from your market – your customers. How is your business performing? What are your customer’s opinions of your company? What new products/services would they benefit from the most?
You can then broaden this research by gathering market statistics, collecting data from local community organizations, creating reports and analytics based on social media insights, etc. With this information and the utilization of a factoring company, your business can increase sales, introduce a new product/service or expand to a new location. All in all, conducting market research and knowing the ways to succeed in financing minimizes the risks of expansion and increases your chance of success.
- Incorporate New Technology
In the past, customer insight was for those privileged enough to have large marketing budgets. Now, thanks to rapid advances in technology, customer data mining is just as accessible to small businesses and startups as it is to large companies. The technical savvy business – of any size – can easily tailor content and reach into different markets. If utilized correctly, these new and effective resources and tools can help your business seize opportunities to distinguish itself from the competition.
Incorporating technology into your growth strategy allows you to reach larger audiences; for example, digitally engaging customers via social media, email marketing and online advertising. Social media alone has an overwhelming 2.307 billion active users, and is expected to grow to 2.55 billion by 2018. In boosting your business’ social media presence, you can increase visibility, promote services and products, provide personalized offers, engage customers, enable direct buying options and gather customer feedback.
Through easy storage options, technology can also eliminate the need to file large amounts of paperwork and use double (or even triple) entry systems. This significantly reduces the time it takes to share information, and allows you to make decisions quickly. While your workload is reduced, the level of productivity and coordination increases. Incorporating multiple backups also minimizes the chances of important data loss. Your willingness to embrace technology provides endless opportunity, including monitoring the growth and productivity of your business.
- Diversify Your Existing Product or Service
Product or service diversification is another effective form of business development. This business growth strategy can be implemented by modifying your business’ existing product/services or by adding new products. In tweaking an existing product or service, you can appeal to a new group of consumers. Businesses often choose to create a new product when they see a strong market opportunity, but feel their existing products are not the right fit to take advantage of it. Similarly, creating a whole new product or service allows you to open a new territory; this is an ideal approach for business’ facing strong competition or experiencing a drop in demand for their product.
The first step is to assess the resources required to implement a diversification program. Will your budget cover development and marketing costs? Does your team have the market and product knowledge to achieve your goal? Do you currently have the production capacity to manufacture the product (if you plan to do so yourself), or will you need to invest in a larger location and hire additional staff?
If you are considering product diversification as a method to expand your business, be sure you assess both the opportunity and the level or risk involved. While the diversification needs to present an attractive opportunity for your business, the development and marketing costs must also allow your business to earn a profit. Before making a commitment, make sure you spend some time analyzing the needs of the market.
- Align with Other Brands for Business Growth
Essentially, a business alliance is a formal business relationship between two companies that allows them to achieve collective objectives. The biggest benefit of an alliance is that it enables your business to realize its growth potential and expand much faster than it could pursuing an objective alone. In addition, an alliance offers access to your partner’s network of customers, distribution channel and supply chain, enabling you to quickly dive into a new market and build brand recognition. The relationship also presents an opportunity to share information and resources for undertaking a specific, mutually beneficial project.
The key is to select the right business alliance for the intended goal. If the goals, objectives, strategies, ethical standards and business values of the businesses conflict, the alliance will have the opposite desired effect. On the other hand, when the right business partner is chosen, it can help your business successfully grow sales, reach new customers and increase production capabilities.
- Seek Financing for Expansion Efforts
Regardless of the method you choose, expansion efforts require adequate funds to execute and see your project through to completion. Increasing marketing campaigns, reaching new markets, product research and development and finding a new location all require capital. To cover expansion costs and sustain cash-flow, it is often necessary for a growing business to secure outside financing. For the small business owner, it can be difficult to find flexible cash solutions. Depending on your industry, that list might narrow even further.
According to the 2015 Small Business American Dream Gap Report, 26 percent of the businesses surveyed shared that they avoided hiring and expansion because of the inability to access adequate funds. As a result, they had to resort to stretching their personal finances (personal savings, personal credit cards, loans from family and friends, etc.). Others turned to alternative financing options to fund their expansion efforts. Unfortunately, while these options promise quick cash, but they also add costs add a heavy burden of debt.
Invoice factoring, on the other hand, provides your business with the working capital it needs while allowing it to steer clear of debt. Essentially, the invoice factoring process involves your business leveraging its unpaid invoices to generate cash on hand and promote business growth. The advantage of this solution is that your business receives cash it has already earned and your business maintains flexibility, without adding a burden of debt. Thus, invoice factoring offers your business the funds it needs to grow and expand, while also protecting your business’ long-term financial health.
Security Business Capital’s Business Funding Solutions
The team of experts at Security Business Capital specialize in helping companies secure the funds they need to operate smoothly, grow their business and take advantage of opportunities. SBC’s invoice factoring services, for example, allows you to use unpaid invoices to secure the cash you need quickly. Invoice factoring is successfully used by many different industries, including: manufacturing/distribution, business services, transportation, oilfield companies, among many others.
To learn more about Security Business Capital’s invoice factoring option or other services, contact SBC for a free quote and/or consultation.
After surviving the startup phase and successfully building a small business, you have probably wondered what the next step is. How can you successfully expand your business beyond its current status? As your focus shifts to further growth, consider the following five small business expansion tips that will help you take your business to the next level.