Every business reaches a point when it’s time to take things to the next level. From startups to veteran companies, there are many reasons to force business growth. Does your business sit in an evolving industry? Has your business received increased demand? So much that is has forced you to expand to service that need? Growth for a business is always a good thing, especially if that growth is organic and is based on servicing an inadequacy in your business.
When it’s time to grow, there’s a way to do it appropriately so that it doesn’t risk your business. How you grow depends on the type of business you own and its current status. Selecting the proper growth strategy will also depend on the resources available to you, how much money you are willing to invest, and if you are able to sacrifice the amount of time and sweat equity that’s necessary.
If you run a brick and mortar location, obviously growth means opening another location. However expanding into new territory isn’t simple. Having two locations does not always equate to doubled profit; the math that’s involved in knowing if physical expansion is right for your business is much more intricate. If you have not properly managed your cash flow, stayed up to date on the economic and consumer trends or maintained impeccable financial records, justifying expansion will be difficult. Not to mention the gamble involved if you do indeed expand without observing all of these considerations.
Perhaps instead of expanding into another location or storefront, you may want to consider licensing your product or offering a franchise opportunity. A franchise opportunity can be a great vehicle for expansion because it places much of the responsibility that ownership requires. In both a franchise and licensing growth model, your business can receive a wealth of upfront monies and royalties from the continued sale or use of your product or services.
You may also want to consider seeking and forming an alliance with a comparable business. Joining forces with the competitor and doubling your brand loyalty could be a way to reduce margins from the lessened competition and make more profit. Alliances are always popular because they rapidly increase market share for your product and increase demographics without a drop off in profit.
Don’t allow the need for growth to disrupt your business and sacrifice your margins. Business growth should always be premeditated, and the more preparation the better.