If you are an entrepreneur or a small business owner looking to expand your business and new ways to increase your revenue streams, you probably need to work on a business expansion plan. A business expansion plan can help you achieve the business growth you planned for and meet your future revenue goals. This guide can help you learn more about accomplishing your future business plans and the funding options to execute them.
What Is Business Expansion?
Business expansion is a process that allows your company to increase its revenue streams when it has realized as much income as it can at its current level of operation. There are a variety of options and methods that you can use to expand your business.
You’ll know it’s time to expand your business when you can’t grow and increase revenue with things the way they are now. You’ll need to create a business expansion strategy and put it into play to grow your business any further.
Why You Should Have an Expansion Strategy
When you have a business expansion strategy in place, you’re more likely to grow successfully. As part of creating your expansion strategy, you’ll research all the options and choose the best one for your company.
If you attempt a business expansion without a strategy in place, you may find that you spend a lot of money without reaping the benefits you hoped to achieve. An expansion strategy is a roadmap to success, and you can use it to help secure any funding your company might need for its expansion.
Methods To Expand Your Business
There are many methods available to you when you’re ready to expand your business. It’s always a good idea to research the various techniques and feel how each would help your expansion goals.
Some methods require little funding while others require more. In some cases, the expansion method costs less but also offers fewer growth opportunities. Therefore, it would be best to balance the cost of the expansion and the possible realized revenue increase. Here are a few methods to consider:
Expand to New Locations
Expanding your business to a new location is a great idea. It can increase the space you have to do business or to produce goods. The relocation might also make it easier for the new potential customer base to find you.
For example, if you run a small pizza restaurant, a larger space can give you more room for customers. If you move to an area with many homes nearby, you can increase the number of delivery requests along with customers coming into the space.
Develop New Products or Services
A new product line or list of available services can encourage your current clients to buy even more from your company. It can also help you grow your customer base.
You might add one or two items or services or launch an entirely new line. This type of business expansion requires your company to research the products currently on the market in your industry and identify any areas that aren’t being filled.
Launch Marketing Campaigns
When you have a great product line and are in a great location, you might need to find the right customers. A marketing campaign can help you do that. Marketing campaigns can include ads on social media or sending free products to potential customers.
You might opt for a marketing campaign that provides a substantial discount to new clients. Your marketing campaign must target your potential customer base. Depending on the size and scope of the marketing campaign, you might need additional funding to help your company launch it. An essential part before launching will be to create the right marketing strategy that is aligned with the business goals you want to achieve.
Expand Your Partnerships
Have you partnered with another company to entice both of your companies’ customers to buy products? You might consider doing this. You might even consider sponsoring an event for another business if their customers might be interested in your products or services.
It’s essential when expanding the partnerships that you look for companies with similar product lines that aren’t in direct competition. For example, if you own a small pizza shop, you might partner with the wing store beside you to deliver to nearby customers.
This type of partnership increases the revenue of both companies without competing for customers. Your clients also enjoy the value of the partnership, building loyalty.
Recapture Existing Customers
Do you have customers who used to buy more frequently or have stopped buying altogether? When you work to recapture existing customers, you can expand your business.
By encouraging them to return to your shop or brand, you’re tapping into a revenue source that you once had and need to grow. You might do this through a special promotion or some other type of marketing campaign.
Ask for Referrals
When looking for new customers, it’s always a good idea to turn to your existing ones. Your customer base is already happy with your goods or services. It might be that they like the quality or the price point.
However, they might not openly talk to other people or businesses about your products and services unless you ask them for referrals. You might even consider setting up a rewards program for referrals, such as money off a purchase for both the new customer and your existing one.
Participate in Trade Shows
Trade shows within your industry if you’re a manufacturer or offer some applicable service are great ways to expand your business. If you opt to attend a large trade show, you might find new customers from around the United States or even worldwide.
To participate in a trade show, you’ll need displays and sample products. You might consider handing out samples of a new product and taking orders during the show to maximize your investment.
Grow Through Acquisitions
If there’s a smaller industry or a manufacturing plant, you might consider a business expansion through acquisition or a merger. The company you acquire should help your business grow in some way.
It might be that you can acquire their customers or add to your product line. For example, if you acquire a manufacturing plant, you can use it to produce more goods and meet the demands of your customers.
How to Finance Your Business Expansion Projects
The amount of money you need to finance your business expansion project depends on the method you choose for expansion. Here’s a couple of ways you can finance the expansion project:
- Bank or traditional lender: If you have time and a great credit score, you might consider using a traditional bank or lender to finance your project.
- Alternative lender: When you need the funds fast or don’t have a healthy credit score, an alternative lender can help.
