After you’ve established your business and are starting to feel cramped with your current setup, it might be time to grow. There are several ways to expand, from large investments like opening a new location to making small tweaks to your marketing strategy. But before you commit to any of these strategies, make sure your business is ready to take on that kind of responsibility.
8 strategies to grow your business
You might want to consider some or all of these strategies when you’re ready to take your business to the next level.
1. Research new niches in your market
Even if you’ve already done market research, take another approach to refresh the angle you’re taking. Market research can help you find gaps that your competitors aren’t filling. This can give you an idea of how to better serve your current customers, who might buy more of your products or services in return.
2. Find new uses for your product
If you have a product that can be used more than one way, make sure customers know about it. You might want to conduct a focus group or survey to find out if customers are already using what you sell for something else if it’s not obvious. Then invest in a marketing campaign highlighting this new use to expand your customer base.
3. Open a new location
Expanding to a new location can allow you to up production and serve new customers. This plan can come with some major costs, like hiring new staff, buying or renting real estate, purchasing equipment, and more. Run some financial projections first before you make such a large investment. In some cases, it’ll more than pay for itself.
4. Invest in customer service
Another way to keep customers coming back is to build your reputation for customer service. Invest in a dedicated team, consider setting up more channels to get in touch – like adding live chat to your website – and respond to complaints on sites like Trustpilot and the Better Business Bureau.
Also, consider investing in trainings for any employees who deal with customers – providing a good experience can build a loyal customer base.
5. Harness the power of social media
If you haven’t already, consider developing a social media strategy to reach more customers and promote your content. You might want to explore paid and nonpaid content, working with influencers, and what types of content you’d use to promote.
Also, consider which platforms are best for reaching your customer base. If you’re selling something visually appealing, for example, Instagram or Pinterest might be the way to go.
6. Collaborate with other businesses
Businesses that innovate through collaboration are more likely to report increases in productivity, as well as develop solutions that are new to the world. Four necessary factors for successful collaboration within and between businesses are:
- The ability to recognize and apply external knowledge
- Having a shared purpose people believe in
- Mutual trust
- Strong leadership
If you can identify an opportunity – such as efficiency benefits from combining supply chains – and engage another business with similar needs in alignment with the four factors above, then you might have an opportunity for collaborative business growth.
You can also collaborate internally. The more your team members work cross-departmentally, the more opportunities there’ll be for new ideas to come to light.
7. Wait for the right time
At the end of the day, the problem might be boiled down to your business not maximizing its profit potential — and expansion may be the right solution. An increase in profitability is a type of growth, too. In all cases, it’s important to know when it’s time to expand your business.
If there are no specific problems that can be solved by growth, it might be better to hold off. Make sure your business can afford the costs or is set up to pay them off on time if you have to get financing.
8. Don’t be afraid to finance
Expanding your business often takes an upfront investment. If you don’t have the cash on hand, you might want to take out a loan. In fact, growth is one of the top reasons businesses borrow.
Here are a few of your best options for financing:
- Business loans. These range in variety, including how much you can borrow and repayment periods. No matter what kind of business you own, you’re sure to find a business loan that fits.
- Business credit cards. A business credit card offers a few advantages if you’re spending on smaller investments, such as rewards or 0% APR periods. Plus, business credit cards will help keep your business expenses separate from your personal expenses.
These aren’t your only options. If your business has a promising financial history, there are other business financing options for small- and medium-sized businesses.
Factor in the costs before expanding
No one can ignore the factor of cost. It’s sensible to expect considerable costs and reduced profits while your business adjusts. Consider costs like:
- Additional training, hiring expenses, and other human resource costs
- Extra maintenance costs
- Increased overhead and logistics costs
- The potential loss of customers
- Loss of revenue as you transition
- Increased marketing expenses
- Financing charges like interest and fees
Subtract these expenses from the projected profits to get your return on investment and ensure that it’s worth it.
Should I expand?
Examine your business’s cash flow carefully and be ready for potential problems. Your expansion plan should include a clear timeframe and a budget forecast in line with predicted industry movements over the next few years.
Here are five questions to ask yourself to prepare:
- Will growth improve my quality? If you suddenly have more customers than you can handle, hiring a larger team can improve quality. But if you scale production without hiring staff, it could suffer.
- Could growth increase my presence in the market? If your products are highly regarded and well-received, that may indicate you’re able to increase your market presence.
- How will growing impact my efficiency? Sometimes investing in new equipment or training could make your company more efficient. But adding more steps to the process could slow you down.
- Is my industry changing? If your competitors are expanding in a way that threatens your current operations, an expansion might be a means of survival. It can also help you get a leg up on a new market.
- Have I reached capacity? Businesses that are struggling to keep up with demand might need to expand in order to stay afloat. It also can help you secure larger, more profitable contracts.
Bottom line
Business expansion should ideally provide a solution to a problem your company’s facing. When the problem is that you’re running out of office space and your staff is running on empty, an expansion might be the solution. Low profits can also be a problem, and business growth is one way of fixing that.
You can read our guide to business loans to learn about other options to finance a growing business. You also might want to check out our guide to increasing business profits before you borrow.
This article originally appeared on finder.com.
