Starting a business is an exciting endeavor, but even more thrilling is what comes next – expanding your small company into an even bigger one which reaches more customers and enhances many more lives.
It’s rather like watching your children go off to college. You’ve nurtured the business from day one, helped it through growing pains and now you’re ready to see it spread its wings and branch out and away from where it all started.
Just like when helping your children decide which college to go to and what to study, there are many things you need to consider before expanding your business into another town or state. From location to who is going to manage the new set up, everything down to the smallest detail needs to be planned if the expansion is going to be a success.
Here are some of the things you need to take into consideration before expanding your business.
Think about the best location to expand into
The first aspect of an expansion that you need to consider is where are you going, location wise? They say don’t change a winning recipe, and that is especially true when it comes to expanding a business – you’ve already been a success, so follow the same blueprint as you did when choosing to locate in the first place.
There needs to be a requirement for your services – there would be no point opening a new branch of your popular coffee shop in Berkeley, California which has one coffee business for every 2,073 residents. The cost of setting up in a new location also needs to be considered carefully as rental prices, commercial property rates, and average wages can vary hugely from state to state.
Finally, look at the prospects of the city you want to expand into. You probably don’t want to be moving into a city such as St Louis where the population has declined by 62.7 percent. Instead, look to one of America’s fastest-growing cities such as Boise, Idaho or Tacoma, Washington. A location which is experiencing population growth will give you an increasing number of potential customers to tap into.
Who is going to run the expansion?
Nobody can be in two places at one, not even a successful entrepreneur. That throws up the tricky question of who is going to run the new office in the location you are expanding into? You might just about be able to manage two businesses in one town, but if you are expanding into a city far away or indeed another state, then you need to find someone to manage it.
Expecting an outsider to come in and begin running one of your businesses to the same level you have over the years is asking a lot, especially in the crucial early stages of a new set up. You might, therefore, be better off asking one of your existing employees who knows the structure and routine of your business to step up to the plate.
If that is the route you decide to go down, then they may need some convincing to up sticks and move to another part of the country. The opportunity of promotion to management level combined with a decent relocation package can help – this page has some ideas on employee relocation.
How will you market in your new location?
While your business may now be well known in its initial location, unless you’ve managed to gain a statewide or nationwide reputation already, chances are you are going to be starting from scratch in terms of marketing.
That means the success of your marketing strategy will be crucial. If your business trades largely off reputation, then you might not have had to worry too much about marketing since setting up. In which case, you’ll need to get reacquainted with it and fast as marketing has changed immeasurably even over the last couple of years; what worked when you started could now be more outdated than the floppy disk.
These days, the best way to market is doing so digitally. Digital marketing is not only more sustainable, but it is also much cheaper than traditional methods of advertising such as newspaper advertisements or flyers.
At the forefront of digital marketing is social media. With Facebook, Twitter and Instagram producing ever more impressive algorithms that mean that advertisements on their platforms can target a specific audience based on age, interests, and location, then social media can offer huge opportunities for your business.
The key aspect here is the location. With potentially no presence in the city you are expanding into, you need to get your business known and visible locally, and social media can help you do that. You can also team up with established business which compliments the service you provide to promote each other. If you are a microbrewery, then find a popular food truck and offer them a free batch of beer to sell to their customers with their food in exchange for plugs on their social media channels.
By building connections with existing businesses through the internet, you can get your business’ name out there to its new target audience.
One business spread over two locations that could quite conceivably be hundreds of miles apart can throw up challenges in terms of data management. How will you share information between branches so that the overall company has a much stronger chance of success?
If you haven’t already considered the option of cloud computing, then this is the perfect time to do it. With this technology, all your data is stored on the cloud and can be accessed by any employee in any location. You could even pull the data down when flying between your various offices.
Cloud computing is of course not without its challenges and by expanding your business, you are likely to have double the amount of information on file which can make you twice as big a target for viruses or hackers. As a result, expansion brings increased responsibility to protect both yours and your client’s data from threats – so make sure your security measures are up to scratch.