Growing a small company today is not hard because the economy has improved significantly since the housing crisis. According to the US Commerce Department, the American economy grew by 2.8% in the third quarter of 2013 spurred by businesses restocking shelves as well as increased demand for new homes. For small business owners, this is a great time to expand to new markets. Here are some great tips that you can use to achieve this goal:
Employ The Right Staff
Expanding your company to a new location means that you require new employees. However, the staff you hire can make the difference between success and failure of your company’s expansion efforts. For example, rude employees can have a negative impact on client relationships as well as productivity at the work place. A report published by the Harvard Business Review (HBR) says 50% of employees treated rudely by colleagues reduce the quality of their work.
In addition, customers who experience incivility from employees develop negative attitudes towards the business’s goods or services and its corporate image. At the end of the day, such incivility will hurt your business’s bottom line. With this in mind, it is wise to carry out a thorough background check on all potential employees to weed out candidates with troubling behaviors. It is also wise to conduct civility training before new staff start work.
Acquiring competitors is a great way of expanding your company’s footprint. The problem is some small business owners think that acquisitions are for big companies alone. You may be surprised to find that some of your competitors are struggling to stay afloat. In such a situation, they are unlikely to turn down an acquisition offer.
Nevertheless, you should carry out due diligence before offering to acquire a competitor. Make sure you go through your acquisition target’s financials with a fine toothcomb. Check the cash flow, vendor licenses and contracts if any, as well as credit status with financial institutions. You do not want to overpay for a company that does not generate substantial revenues.
Traditionally, businesses focused on one product or service. This does not make financial sense in the current business environment. Even the majority of technology-based businesses do not focus on a single service. For example, social networking sites such as Facebook and Twitter provide platforms where people can socialize and consume news. At the same time, they use the data they have gathered from people to make it easy for marketers to sell their products. It would be up to you to look at your market niche and find out unique ways of diversifying the products or services you offer. For instance, someone running a company that stores data in the cloud could start offering data security solutions. The beauty with diversification is it will open new growth opportunities that you might not have known exist.
With entrepreneurs springing up all over the place, reaching out to new consumers can be tricky. Remember consumers in the new location you are eyeing may have never heard about your company. This means you have to market your brand by creating messages that resonate with them. On the Internet front, go for a marketing tool that allows you to measure conversion rates, sales leads, attrition rates, and sources of traffic.
All in all, it is the dream of virtually every entrepreneur to expand his or her business. Some of the ways you can go about creating an expansion strategy include hiring the right staff, marketing, acquiring competitors and diversification. If you are unsure about the strategy that you are about to implement, you should hire an experienced professional to provide advice and guidance because you obviously would not want to waste money pursuing an expansion strategy that will not work.
About the Author: Joshua Turner is a writer who creates informative articles in relation to business. In this article, he offers tips to small businesses and aims to encourage further study with an MU Degree of Business Management.
Photo credit: Benjamin Dunn