If it’s time to grow your business, here are some tried and tested tips for intelligent business expansion.
- Hiring: As a very small scale entrepreneur you may have survived doing everything yourself but as your business expands, you need to delegate. This means that you need to start hiring at the right time. The hiring process should begin around three months before the anticipated for the resource. This is to allow for proper orientation and training of the employee. When choosing candidates, soft-skills and a fit with your company’s mission and culture is more important than the hard-core competencies. You can have an initial screening test but for the interview stage asking open ended questions is generally recommended.
- Goal Clarity: As you grow your business, it is important not to let your company mission and objective get diluted. Your newly hired team should be clear about your company’s goals. If you set SMART (specific, measurable, attainable, realistic and time-bound) goals and clearly communicate them, then your growth effort is more likely to succeed and yield better results.
- Competitor Analysis: Keeping a watchful eye on your competitor allows you to benchmark industry best practices as you expand your business. Further you can learn from your competitor’s mistakes and avoid making the same mistakes yourself. When conducting a competitor analysis you need to focus your attention on the top competitors. You can use the Pareto Principle (or the 80-20 rule) when conducting a competitor analysis. This rule states that 20% of the businesses will account for around 80% of the revenue. Hence, you need to carefully examine the strengths and weaknesses of these top players in your industry.
- Forming Strategic Partnerships: As you grow your business, it may be worth your while to form alliances with other companies. For example, if you are an event manager, you could form a partnership with a local catering company. You can leverage the partnerships to provide greater value for your consumer. An interesting variation to these strategic partnerships is when you actually go and acquire another company. If your budget permits this, then you can use acquisitions as part of your growth strategy. For example, Facebook acquired companies such as Instagram and Whatsapp and in this way also eliminated rapidly growing competition from the market.
- Reduce Risk: Business risk can never be completely eliminated. However, as you expand your business, careful planning can help minimize risk. Planning your budget, resource allocation and cash-flow reduces the element of uncertainty in your businesses future performance. When using past information about disposable income to plan for the future it is important to include a contingency element in your budget to account for unforeseen expenses. Economies of scale will likely cut down on your per unit cost but there will always be some expenses that you did not foresee and which will have to be met as you grow your company.
- Tracking and Monitoring: As you expand your business, tracking and optimizing Return on Investment (ROI) becomes increasingly important. You need to have a clear system of determining the value of an investment opportunity. For example, you could use call tracking to determine which of your marketing channels gets you the most productive leads and focus your marketing dollar on these channels. Business growth should be accompanied by a clear understanding of your target customer and her needs. A keyword level analysis can further help you understand the likes and dislikes of your prospective buyer. In this way you can tailor make your ads to appeal to your target audience.
- Flexibility and Responsiveness: One of the major failings of firms as they expand is the loss of flexibility and real time responsiveness to changing customer needs. It is critical to ensure that as your business expands it does not move towards bureaucracy that curbs the spirit of innovation. You need to have a robust approval system in place that optimizes risk without compromising on employee’s ability to make quick business decisions.
- Think Long-term: Brand building and market penetration take time so don’t expect immediate results. For example, if you do a workshop in a local community related to your area of expertise, you are not likely to see tremendous sales the next day. However, in the long-run this will help you establish yourself as an industry expert. Your company will automatically develop a reputation and is likely to grow through positive word-of-mouth and electronic-word-of-mouth publicity.
You can use the above as a checklist to ensure that your business continues to grow in a sustainable manner.