The Internet, magazines, business books, associations, and perhaps your own personal experience provide a plethora of advice on how to expand one's business. Depending on what business you're in, expansion may or may not make sense. But here are some ways in which businesses may consider expanding.
Diversifying is usually what small business does first. This includes, for example, selling complementary products or services, teaching, importing or exporting yours or other's products, or becoming a paid speaker or columnist. If overhead is low in diversifying, then do it. But if diversification costs are high and the return on the bottom line is a really long way out, think twice before going this route.
Opening a new location is another way of expanding your business. However, start-up costs at a new location can run into millions of dollars. Even initial investments of rent (or purchase/lease), inventory, staff, fixtures and advertising will run into six-figure costs. Before opening another location, do your homework: Maintaining your bottom line is key, but growing profits is the goal.
Other ways businesses may expand include offering franchises or licensing business product. Either method may be successful, but with franchising, a business needs to be open to expanding how the business operates. As more people are involved, more opportunities and challenges present themselves.
Licensing product, on the other hand, can generate upfront monies and royalties. It's also a low risk way of selling your product or brand.
Another low risk expansion method is to form alliances with similar businesses. If you're in the business of coaching, why not join with an accredited instructor who teaches coaching and maybe develop an online coaching program? Aligning your business with someone else who can expand your prospective client list is the fastest way to success.
Targeting other markets, merging with another business, and expanding globally are other excellent expansion strategies.
But perhaps one of the easiest and quickest expansions is to take your business online. Bill Gates said that by the end of 2002, there will be only two kinds of businesses - those with an Internet presence, and those with no business at all. And we know how true that statement turned out to be. Develop an Internet presence and put together content that will meet the needs of your visitors.
However you decide to expand your business, the key is to ensure a healthy bottom line with a focus that helps strengthen your niche.