Seeking opportunities to grow your business is part of the natural progression of being an entrepreneur. If you’ve raised outside capital, business growth also means your investors are happier because they are recouping their money at a faster rate.
It is also good for your employees who benefit from the added stability and opportunities. Customers benefit because growth increases your ability to improve their brand experience and meet their needs. Finally, you reap the benefits of an increased bottom line, and knowing what you have created continues to bear fruit.
There are many options available to founders if you want to expand your business. Your challenge is finding the best expansion strategy for your company.
Here are six business expansion strategies that are often successful.
1. Expand your offering.
If you launch new products and services, you are naturally going to attract new customers. You also have the potential to increase business from existing customers. This is true, as long as your customers buy into your new offerings, and you can offer something competitors cannot.
If you are thinking of launching new products and services, it is a good idea to survey the marketplace and get some customer feedback before taking the leap.
2. Identify new customers.
Before you launched your startup, you probably took some time to determine your target audience (i.e., ideal customer). You may have conducted market research to determine which customers competitors were failing to target. You did this because you knew chances for initial growth were tied to untapped demographics.
Now that you want to expand, take a step back and revisit your sales data. Which customers are you failing to reach? Are you giving competitors room to exploit your blindspot for underserving certain demographics?
3. Invest in marketing and referral campaigns.
In some cases, the best path to expanding your business is the organic one. If your marketing and branding efforts are succeeding, your may want to continue as you are, and dedicate more funding and resources to marketing campaigns that will increase your customer base and encourage referrals. It is a slower path to growth, however it is very low risk.
4. Launch or expand e-commerce sales goals.
If you run a local business with local clientele, but offer products or services that can be ordered and delivered online you may want to consider opening an e-commerce store front. Thanks to website builders and platforms like WordPress and other similar platforms, this can be done with relatively low overhead.
On the other hand, if you are solely online, but have a strong local customer base it may be time to open a brick and mortar location. Whether or not that is a good decision depends on your local market, competitive environment and investment.
5. Collaborate with complimentary businesses.
Create a partnership with another business who offers complementary products and services. A joint venture or co-marketing partnership could result in business growth for both companies.
One popular option is simple cross promotion where you and the other business agree to promote one another’s services or products across various channels.
6. Consider licensing.
“For companies with valuable intellectual property, licensing can be a great way to increase revenues without incurring a lot of additional expenses. Licensing is the process of allowing another individual or company to use your intellectual property in return for compensation, typically in the form of royalties (Legal Hero).”
If you can find an established business to license your product, this is a very low risk way to expand your business. However, you need to exercise caution. Some licensing deals are structured so that you lose a significant amount of control over your product or services. In some instances, you could lose all control. If you are not willing to do this, contract the services of a good business lawyer with a background in intellectual property rights.
This article has been edited and condensed.
Ethan Dunwill is “startupper” and blogger, and currently works as a business consultant for Essay Supply, a content writing company which provides help for bloggers.
Ethan mostly writes about marketing, business consulting and content marketing. Connect with @EssaySupply on Twitter.