Open another location. This might not be your best choice for
business expansion, but it's listed first here because that's what often
comes to mind first for so many entrepreneurs considering expansion.
"Physical expansion isn't always the best growth answer without careful
research, planning and number-planning," says small-business speaker,
writer and consultant Frances McGuckin , who offers the following tips
for anyone considering another location:
Make sure you're maintaining a consistent bottom-line profit and that you've shown steady growth over the past few years.
Look at the trends, both economic and consumer, for indications on your company's staying power.
Make
sure your administrative systems and management team are
extraordinary-you'll need them to get a new location up and running.
Prepare a complete business plan for a new location.
Determine where and how you'll obtain financing. (See " Got Cash? " for financing tips.)
Choose your location based on what's best for your business, not your wallet.
2. Offer your business as a franchise or business opportunity.
Bette Fetter, founder and owner of Young Rembrandts, an Elgin,
Illinois-based drawing program for children, waited 10 years to begin
franchising her concept in 2001-but for Fetter and her husband, Bill,
the timing was perfect. Raising four young children and keeping the
business local was enough for the couple until their children grew older
and they decided it was time to expand nationally.
3. License your product.
This can be an effective, low-cost growth medium, particularly if you
have a service product or branded product, notes Larry Bennett, director
of the Larry Friedman International Center for Entrepreneurship at
Johnson & Wales University in Providence, Rhode Island. "You can
receive upfront monies and royalties from the continued sales or use of
your software, name brand, etc.-if it's successful," he says. Licensing
also minimizes your risk and is low cost in comparison to the price of
starting your own company to produce and sell your brand or product.
To
find a licensing partner, start by researching companies that provide
products or services similar to yours. "[But] before you set up a
meeting or contact any company, find a competent attorney who
specializes in intellectual property rights," advises Bennett. "This is
the best way to minimize the risk of losing control of your service or
product."
4. Form an alliance. Aligning yourself with a
similar type of business can be a powerful way to expand quickly. Last
spring, Jim Labadie purchased a CD seminar set from a fellow fitness
professional, Ryan Lee, on how to make and sell fitness information
products. It was a move that proved lucrative for Labadie, who at the
time was running an upscale personal training firm he'd founded in 2001.
"What I learned on [Lee's] CDs allowed me to develop my products and
form alliances within the industry," says Labadie, who now teaches
business skills to fitness professionals via a series of products he
created and sells on his Web site, HowToGetMoreClients.com .
Seeing
that Labadie had created some well-received products of his own, Lee
agreed to promote Labadie's product to his long contact list of personal
trainers. "That resulted in a decent amount of sales," says Labadie-in
fact, he's increased sales 500 percent since he created and started
selling the products in 2001. "Plus, there have been other similar
alliances I've formed with other trainers and Web sites that sell my
products for a commission."
If the thought of shelling out
commissions or any of your own money for the sake of an alliance makes
you uncomfortable, Labadie advises looking at the big picture: "If you
want to keep all the money to yourself, you're really shooting yourself
in the foot," says the Tampa, Florida, entrepreneur. "You need to align
with other businesses that already have lists of prospective customers.
It's the fastest way to success."
5. Diversify. Small-business consultant McGuckin offers several ideas for diversifying your product or service line:
Sell complementary products or services
Teach adult education or other types of classes
Import or export yours or others' products
Become a paid speaker or columnist
"Diversifying
is an excellent growth strategy, as it allows you to have multiple
streams of income that can often fill seasonal voids and, of course,
increase sales and profit margins," says McGuckin, who diversified from
an accounting, tax and consulting business to speaking, writing and
publishing.
6. Target other markets. Your current
market is serving you well. Are there others? You bet. "My other markets
are what make money for me," says McGuckin. Electronic and foreign
rights, entrepreneurship programs, speaking events and software
offerings produce multiple revenue streams for McGuckin, from multiple
markets.
"If your consumer market ranges from teenagers to
college students, think about where these people spend most of their
time," says McGuckin. "Could you introduce your business to schools,
clubs or colleges? You could offer discounts to special-interest clubs
or donate part of [your profits] to schools and associations."
Baby
boomers, elderly folks, teens, tweens...let your imagination take you
where you need to be. Then take your product to the markets that need
it.
7. Win a government contract. "The best way for a
small business to grow is to have the federal government as a customer,"
wrote Rep. Nydia M. Velazquez, ranking Democratic member of the House
Small Business Committee, in August 2003. (Click here to read that
article.) "The U.S. government is the largest buyer of goods and
services in the world, with total procurement dollars reaching
approximately $235 billion in 2002 alone."
8. Merge with or acquire another business.
In 1996, when Mark Fasciano founded FatWire , a Mineola, New York,
content management software company, he certainly couldn't have
predicted what would happen a few years later. Just as FatWire was
gaining market momentum, the tech downturn hit hard. "We were unable to
generate the growth needed to maximize the strategic partnerships we'd
established with key industry players," Fasciano says. "During this tech
'winter,' we concentrated on survival and servicing our clients, while
searching for an opportunity to jump-start the company's growth. That
growth opportunity came last year at the expense of one of our
competitors."
9. Expand globally. Not only did
FatWire grow in terms of customers and sales, it also experienced global
growth simply as a result of integrating the best of the divine and
FatWire technologies. "FatWire finally has international reach-we've
established new offices in the United Kingdom, France, Italy, Spain,
Holland, Germany, China, Japan and Singapore," says Fasciano. This
increased market share is what will allow FatWire to realize sustained
growth.
But you don't need to acquire another business to expand
globally. You just need to prime your offering for an international
market the way FatWire was primed following the integration of its
technologies with divine's.
You'll also need a foreign
distributor who'll carry an inventory of your product and resell it in
their domestic markets. You can locate foreign distributors by scouring
your city or state for a foreign company with a U.S. representative.
Trade groups, foreign chambers of commerce in the United States, and
branches of American chambers of commerce in foreign countries are also
good places to find distributors you can work with.
10. Expand to the Internet.
"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," notes Sally Falkow a Pasadena, California, Web content
strategist. "Perhaps this is overstating the case, but an effective Web
site is becoming an integral part of business today."
Landing
your Web site in search engine results is key-more than 80 percent of
traffic comes via search engines, according to Falkow. "As there are now
more than 4 billion Web pages and traffic on the Internet doubles every
100 days, making your Web site visible is vital," she says. "You need
every weapon you can get."
Design and programming are also
important, but it's your content that will draw a visitor into your site
and get them to stay. Says Falkow, "Putting together a content strategy
based on user behavior, measuring and tracking visitor click streams,
and writing the content based on researched keywords will get you
excellent search results and meet the needs of your visitors."
Take note.
No comments:
Post a Comment