For many ambitious entrepreneurs, launching and running a business means turning long-term dreams into a reality. But in many cases, it also means cashing in 401(k)s and spending long nights and weekends working.
Once businesses are up and running smoothly, owners can focus on the next big goal: growing the business. Whether this means increasing revenue, adding more departments and employees or expanding products and services offered, having a plan in place is crucial for success.
However, just because planning for expansion should be a priority, doesn't mean that it's top-of-mind for small business owners--nor does it guarantee readiness to execute a growth plan. To further explore this topic, my company, Manta, surveyed small business owners nationwide to determine if and how entrepreneurs are planning for business expansion. We found that 73 percent don't have a growth plan in place.
Though it may seem daunting, it's important for small business owners to start thinking about what growth would mean to their business and begin devising a succinct plan. One of the most common paths to growth is to expand into a different market than the one you currently occupy. Not only does this offer you the opportunity to gain new customers and revenue streams, but it can also give you the chance to hire new, talented team members and offer different products and services.
Before taking the leap into a new market, consider these three factors to determine if it's the right move for your business.
Look internally before expanding externally
Delving into your company's current resources--especially your employees and their strengths--before looking for external hires is crucial to success. This process will help you determine if expansion would be the right fit for your business.
To do this, take a hard look at your company's values, your employees' expertise, and your current offerings. Then you can decide how you want to expand--i.e., geographically, with new products or services, etc.--and whether you have the right people with the right skills to make it happen. If your internal manpower aligns with your expansion goals, then it's likely a good fit.
Study up on your new market
Before expanding, it's essential to research the desired market extensively to understand what you'd be getting your business--and yourself--into. After settling on which new business offering or location you want to pursue, ask some serious questions:
Who would be your competitors?
What are they currently doing, and not doing, in their space?
Are there any gaps that your company can fill?
What needs do the customers in your new market have?
Though conducting this research may be tedious, it is well worth the effort in the long run. This knowledge, combined with the internal review of your employees' skills, will give you and your business the confidence you need to not only expand into your new market--but conquer it.
Tune into your community
Small businesses are the heart and soul of their communities. If you are looking to expand by developing a new product or service, tap into your local community before planning the details of your expansion. If there is an unmet need in your neighborhood that aligns well with the expertise you have internally, make sure your company fills these voids as you work towards a launch date.
For instance, if you own a local coffee shop and you uncover a real need for a quality bakery in your community, this could be a great place to start planning your expansion efforts. Not only will this move strengthen the ties you have with members of your community, but it's also a surefire way to ensure expansion success, since your offerings will have little competition.
Walking through these three steps will not only help you determine whether a move to expand will be a good fit for your small business, but also will help ensure that the move goes off without a hitch.