If you’ve managed to set up a successful business, then firstly, well done!
However, if your business has evolved and is performing well, the next logical step is to undertake an expansion. Yet doing this poses significant challenges, so it’s crucial to have a robust strategy in place before you start moving forward with your expansion.
Whether you’re looking to expand into different markets, offer new services, or even open up shops in more locations, read on for our top tips on business expansion.
Conduct market research
According to ONS data, there are an estimated 5.6 million private sector businesses in the UK, which means that the chances of someone offering the same as you are high. To ensure your business expansion goes swimmingly, it’s important to conduct thorough market research. This will help you to understand whether there is enough demand to service your business and what the competition is going to be like.
If you’re trying to break into a saturated market, you’ll need a strong proposition to make your expansion a success.
Consider your cash flow
It’s no secret that sometimes cash flow can be tricky for businesses. Therefore, when you’re planning your expansion, it’s important to look through your books thoroughly to assess whether you can afford to grow.
To cover the costs of expansion (such as buying new premises or hiring more staff), you may need to consider applying for additional funding to cover the extra costs you will incur.
Rethink your online offering
If expanding into new markets or locations may be a stretch, why not consider expanding online instead? Although 84% of businesses have a website, if you’re one of the 16% that don’t, developing your online offering could be an excellent place to start.
If you already have a website, you may wish to consider refining it to encourage more customers to spend with you.
Think about logistics
Business expansion is exciting, but it isn’t without its teething problems. Before you go ahead with the expansion, it’s helpful to think of the logistical side of things. For example, if you buy new machinery, where will this go? Do you have the warehouse space to store additional products?
If you fail to consider this beforehand, you might end up in a rather sticky situation!
Consider how many new hires you will need
Growing your business may require you to hire more employees, which can get expensive if you’re not careful.
Before you put job roles out, talk to each team in your business to decide what skills are needed to fill any gaps. Then, it’s good practice to compare the cost of the new hire with the revenue you’ll get from hiring as part of your expansion.
If hiring a new employee is deemed profitable, go ahead and get the word out.
Business expansion is exciting. But it isn’t risk-free. Unfortunately, many businesses fail to adequately prepare for their expansion, meaning the growths go less than smoothly. However, by planning ahead and keeping the above in mind, you too can allow your business to thrive.