When you first set up your company, you had a vision of where you wanted the business to be in the future and outlined it in your business plan. Now those initial years have passed, you’re well-established and making a healthy profit, and it’s time to revisit those early projections and plan for what comes next.
Some business owners are perfectly content to build their business up to a certain level and then maintain it rather than letting it grow any more. Entrepreneurial types embrace the concept of continuing to build their business, and at this stage, you could be ready to consider expansion.
Expanding Your Business
Expansion isn’t without its risks, so it’s something that needs careful research and planning. You’ll be reinvesting your profits, and although you’d hope for success and even higher profits in future, reinvestment does put your capital at risk. Some businesses expand too rapidly and find they’ve been too ambitious, meaning they’re forced to downsize. Other companies branch out into areas that they believe will be profitable, but in which they don’t thrive, which can impact the core business as well. You need to be at the forefront of current trends in your industry, but able to distinguish the ones that will last and those that are likely to fail.
You should also consider the value of hiring professional services to help you with your expansion plans. That could mean drafting in an accountant to check the figures and verify your projections are accurate – or spot any hidden flaws! Or perhaps you’d do well to engage appropriately qualified legal representation if you’re entering unknown territories, for example, by hiring a lawyer specialising in cryptocurrency and blockchain if you want to capitalize on these newer forms of investment.
The Next Steps
When you’re considering the best way to expand your business, you have several choices as to how to do it. The main methods are:
- Enter new markets
- Expand the product or service range
Entering new markets means expanding your offer to other states, countries, or worldwide, depending on which markets you serve at the moment. You need to assess the appeal of your product to a different culture, review the competition, work out the costs involved, and find out about increasing in-house production or ordering larger quantities from your wholesaler.
You should also check the legal requirements, patent situation, and trading agreements in other countries, which is where your business lawyer can help. These steps are crucial to establishing demand and forecasting profitability, so they must be thoroughly researched and costed before you go any further.
If you want to expand your product range, the best way is to look for associated products that complement your existing ranges, or services that add value to what you already offer. For example, if you currently sell household electrical goods like toasters and irons, adding a range of garden electricals might be a logical step, or perhaps take a different approach by adding non-electrical items to your range such as crockery and cooking utensils.
Planning for business expansion is an exciting challenge and one that can bring many rewards if it’s successful. Give yourself the best chance of succeeding with your expansion by getting your planning and research right, and using the expertise of the professionals in their field.