The 20th century British statesman Sir Winston Churchill is reputed to have made dozens of motivational statements during his 70-year public career, an oft quoted adage being:
“Success is not final; failure is not fatal: it is the courage to continue that counts.”
Eighty years later, Sir Winston’s words apply to 21st century entrepreneurs and business owners who need courage to build on their achievements and learn from their setbacks.
Businesses are always in a struggle with their competition. There are an estimated 333 million global companies in 2021 alone, and every one of them is in a fight not just to survive but to thrive.
“If you’re not growing, you’re shrinking,” is another popular business proverb, meaning companies that don’t have expansion strategies are likely going nowhere.
What Is Business Expansion?
Expansion is your company’s ability to grow and scale its operations to increase sales. Businesses with strategies for increasing the efficiency of internal processes, including production, have significantly better chances to seize market opportunities than those that fly without a plan. Unplanned development can result in business failure unless you have inventory and processes to keep up with the growth and demand.
When Should You Expand Your Business?
Crawl, walk, run. It’s as true in business as it is in any endeavor. As a startup, you should build your company on a foundation that will establish your brand and vision, and prepare for growth. Focus on defining your business purpose. Business theorist Simon Sinek’s TED Talk, How Great Leaders Inspire Action is a must-watch for any business owner. Financial resources and staff are part of the equation for early-stage expansion planning.
Wherever you stand with your business, your top priority should be to maximize, optimize, and efficiently handle your operations and process. Additionally, always address growing pains, such as communication and PR issues, before making it big.
Business Expansion Problems
It’s common for even the most experienced business owner to run into problems when trying to expand their business. In this section, we’ll help identify what they can be.
- A Lack of Human Resources
People are policy, and if you don’t have the right staff for job—whether it’s in sales, marketing, administration, or production—things will go wrong. As such, approach your human resources strategies with deliberation and purpose. Failure to recruit, train, and retain top-performing personnel will hinder your company’s growth. You also need to hire enough people to maintain a top-notch level of customer service. When you grow your workforce, upper management needs to be prepared to deal with the new and incoming demands.
- Financial Mismanagement
Money is what makes the world of business go ‘round. Expansion is impossible without a firm grasp of overhead, cash flow, and capital generation. More capital is required to open new stores, hire staff, or purchase more inventory. There are two ways to improve your cash flow: increasing sales or cutting costs. Taking a loan to manage the supply chain, inventory, or grow production adds cost. Streamlining internal processes cuts them. Still, if you need fast funding for a marketing campaign or capital expenditure, a loan may be the way to go. But make sure the potential benefits outweigh the known costs.
- A Lack of Tools and Systems
You can’t run a large enterprise properly without various tools and systems, meaning you need to integrate an advanced inventory management solution. Payment processing software optimizes your stock by handling increased CRM software or online orders. These tools can enhance operational efficiency and make business growth sustainable.
Tips to Expand Your Business
Let’s take a look at how you can expand your business successfully:
- Keep Your Vision in Mind
Whatever inspired you to take the risk of starting a business, stay focused on it. Your vision is an amalgamation of your cultures, goals, and motivations. Staying true to your brand will help you express who you are and what you stand for to your targeted demographic while also setting expectations for your employees.
Expansion relies on your courage to stay true to why you started your business. Don’t hesitate to get the support you need to develop your unique business identity because this will gradually embody your core values and fulfill your dreams.
- Be Adaptable
The deeper you dig into methods for expanding your business, the likelier you’ll find that your company model can be improved. Outdated business models all go into the “growing or shrinking” category. You can stay true to your vision and adjust strategies that builds your market presence. As you grow your business model, always be looking for ways to make it more agile and adaptable.
Trends and market demands are in constant flux, so uncertainty always looms over your decisions. A flexible company can quickly reassess strategies and steer toward generating new revenue. Adopt tools that make operations more efficient, take decisive action, recognize opportunity, and have a Plan B. This is business school material, so don’t be afraid to recruit a business coach, complete an educational course online, or find a mentor.
- Invest in the Right Resources
Putting a business expansion strategy into action requires resources, which is why you can’t achieve this until your business matures. Working with cash flow that is either too high—that can be a good problem to have, but it also might mean you’re not making smart investments—or too low can result in problems keeping up with demand or paying your bills. Once you’re confident that your finances can support opening more stores or branches, you can move forward with your plans.
- Be Honest with Yourself
Successful entrepreneurs and leaders are realistic and objective. You can’t expand without a clear-eyed appraisal of where you are now. Evaluate your current status and ask yourself: Am I firing and hiring employees efficiently? Where do I want to go next, and what systems can be put into effect to get there? Am I shouldering too much of the work or am I delegating tasks effectively? Honest answers to questions like those are the essential to growth that drives consumer engagement and sales.
- Fine-tune All Operations
Operational efficiency ensures you are maximizing the value of your resources. Fine-tuning your business’s moving parts to work together will ensure that it runs well, whether that’s finances or staffing processes. Various tools and software are available that integrate systems to streamline workflow processes smoothly.
If your company is relatively new or poorly managed, you will need more communication and better time management with your processes and systems, even in later stages. You can fix this by becoming or finding a professional to implement these policies.
- Be Mindful
Sustainable growth is a purpose-driven endeavor. Rather than focusing on a sharp, upward growth strike, it’s much more fruitful to analyze the preceding linear growth, which acts as an incubation period. A business can incubate results in nurtured branding, marketing, operations, and sales techniques. A line from blues musician Paul Thorn’s “Everybody Looks Good at the Starting Line” illustrates the idea: You can hit the ground running like you’re shot from a gun, but doing the distance is the hard part, son.” Don’t indulge in explosive growth if your foundation can’t sustain it; it’s a catastrophe that few business owners recover from.
Business expansion is challenging, but with the proper techniques and strategies, you can simplify the process. Empower yourself to succeed, find innovative solutions, and face your fears. Making a plan that highlights your vision and where you see your business in the next five to ten years is recommended. As time progresses, you’ll observe better communication with your team, improved engagement with clients, and an overall increase in sales. If you’re unsure where to start, go through our comprehensive guide to kickstart your business expansion journey and reap the rewards.