Many business owners may have achieved some success. However, with one location, they may still feel like they have yet to achieve their full potential. Many of the largest companies in the world such as McDonald’s and Walmart all started as a single location after all. Expanding a business presents its own unique challenges you must overcome to succeed. Below are some things you must take into account.
What Are Your Goals for Expansion?
Like any business endeavor, you must have explicit goals. That way, your success or failure can be properly assessed. You shouldn’t expand your business simply to expand. Instead, you should have a specific goal such as doubling or tripling your profits. Another goal would be to transform your business into a franchise model so you can become an executive for the entire brand instead of doing all the work yourself. Another goal may be to create a larger business empire for your children to manage after you retire. Whatever the case, make sure you know exactly what you want out of this expansion.
What Kind of Expansion Do You Want?
Traditionally, we think of business expansions in regards to creating new locations in addition to an original location. However, today, there are many other ways to expand your business that may not require as much investment. This is certainly true if you plan on expanding your business via the internet. Doing so can give you access to consumers from all around the world by shipping your products directly to them. This can end up becoming a significant source of income for your business considering that nearly 5 billion people use the internet worldwide. Your online sales could end up dwarfing what you make from brick-and-mortar retail.
Where Can You Feasibly Expand Into?
Just because you want to expand to a certain place does not mean that venture will be successful. There are many factors to consider. Many of these you can’t discover for sure without spending a decent amount on market research. While consumers in the eastern United States may love your products, for example, consumers in the Midwest and the South may not. In that case, expanding into those regions without serious changes to your business model may end up becoming a boondoggle. Expanding into a foreign country can be even more difficult. You have to consider differences in language, culture, preferences, trends, government interference, and even religious practices. Overall, do your research.
What Will Be the Management Structure?
A greatly expanded business simply cannot be managed the same way a much smaller entity can. Currently, you may directly manage all aspects of your single location. However, if you expand to multiple locations, you are going to need to give up some control. You can’t do everything yourself. You’re going to need to give some thought to changing the management structure of the company to allow others to help you achieve success.
The physical and legal aspects of a newly expanded company must be considered as well. For example, you may need to do something like setting up a new company headquarters to help coordinate all your decisions. If that headquarters is in Las Vegas, you may need to set up a virtual office in Las Vegas to help funnel any important mail to your headquarters instead of having it dispersed to multiple locations.
Do You Have the Right Business Relationships?
While operating your current location may be something you’re used to, expanding into new locations may present challenges you are unaware of. For example, your current suppliers may not be able to ship the goods you need to those new locations. This may require forming new relationships with new suppliers. The same could be said for distribution. The distributors in a new market may operate quite differently. They may charge you more and expect a certain level of sales volume from your products. Whatever the case, you must hammer out these issues during the planning stages of your expansion.
Conclusion
Overall, don’t rush into the expansion process. If you do, you’re quite likely to make significant errors. Some of these errors might be so great that the costs could lead to the end of your business. Instead, only take on an expansion project after the appropriate research, leg-work and planning have been completed.
