Sound Advice For Expanding Your Business

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As the economy grows stronger more and more businesses are beginning to think about expansion.  Generally speaking, this is an excellent time to expand, with market niches left open by the collapse of businesses during the recession and with more money now in the hands of consumers.  For each individual business, however, decisions as to whether and how much to expand need to be cautious ones.

Expanding Your Business

Making sure of the basics

Before beginning to expand a business, several things need to be considered.  Most important is the overall state of a company’s finances.  Financial plans for an expansion should be drawn up much like plans for a new business, with projections based on expected income troughs and peaks.  In cases where funding for the expansion is to be sought from banks or private investors, it’s helpful to draw up a fresh business plan.  Finances should never be stretched to the limit to enable expansion; there’s more than one way to do it and there is no need to expose the core business to high levels of risk.

The other essential thing to do is thorough market research.  Just because customers have more money to spend doesn’t mean it’s obvious what they will want to spend it on, or what kind of persuasion they will need to make favorable choices.  It’s vital to understand new markets before becoming dependent on them.

Different forms of expansion

There are several different ways in which a business can expand to take advantage of increased market potential.  Many first think of opening up a new site, but this can require a lot of extra management work and rearrangement of staff roles, so its viability will depend on the overall state of the team.  An alternative route is to stick with current location(s) but try to reach out to new markets, perhaps by advertising to different groups of people through the internet, or by creating a new, tangentially related product line.

Connecting with another business through a merger, an acquisition or a simple marketing alliance can provide ready-made access to customers with minimal trouble, allowing for rapid growth.  Expanding and diversifying your customer base through strategies like this has the added advantage of making a business more resilient over the long term.

Sourcing assistance

As federal and state governments try to encourage economic growth, a variety of grants and loan schemes are available for businesses looking to expand.  Banks are beginning to offer more favorable terms, especially to well established businesses, and investors are once again looking for opportunities.  This means that networking is, now more than ever, a key factor in preparing for potential expansion.

Expanding businesses may also find that they need practical assistance to manage the new and expanded tasks they will have to deal with.  Finding a reliable umbrella company that can offer access to variously skilled staff is very useful in this situation, especially during the interim period of adjustment when precise long term needs are uncertain.  It can help to provide stability at low risk while things settle into place in the new arrangement.