Enjoy another guest blog post from Derek Goodman. This one has some great advice about expanding a small business. The links all go to website advice articles and seem safe. Contact Derek via email at firstname.lastname@example.org.
Expanding a small business is a major decision that takes careful consideration, as expanding at the wrong time could do more harm for your company than good. But if you have plenty of funds sitting in your business bank account and you’re so busy that you’re having trouble keeping up with customer demand, it may be time to expand — whether that means increasing the number of products and services you offer, growing your team, acquiring another company, or franchising your small business.
Before moving forward with your business expansion plans, it’s important to keep several key factors in mind. D. Greg Scott discusses three of these factors in the sections below.
Growing a small business costs money, but your company should be scalable (or ready to scale) before you move forward with your expansion. And according to OpenGrowth, scalability occurs when the resulting profits of growing a business far outweigh the cost of expanding. Scalable businesses keep variable costs low, including shipping and delivery fees, production supplies and materials, advertising and publicity costs, and sales commissions.
In addition to scalability, it’s important to consider your inventory needs and costs before expanding your small business. For instance, you may need to purchase new merchandise when growing your business — and pay for storage units or warehouse space. You may also need to apply for financing if you can’t purchase additional inventory outright. However, there are pros and cons of using inventory financing when expanding a business — and it’s a good idea to consider alternative options as well (such as vendor financing or business lines of credit).
When growing your business, you’ll also need to think about how you’re going to efficiently manage your inventory. Software tools can help to simplify inventory management and keep your business running smoothly, but it’s important to select programs that can be integrated with your other software systems — including your accounting, shipping and fulfillment, and point-of-sale system.
Intuit software tools are one great option, as they allow you to automate your inventory management in real-time, fulfill customer orders in a timely manner, and track product costs and profitability. You’ll also be able to see:
- Your available inventory.
- The exact location of each item.
- Delivery dates and order statuses.
Moreover, Intuit programs can be used to manage other aspects of your growing business as well — including payroll, time tracking, sales, and reporting. QuickBooks Enterprise can be used to manage everything from inventory and job costing to accounting and reporting.
If your business is expanding into a new geographic area, you’ll also need to ramp up your marketing efforts and focus on location-based marketing. Through the use of location-based marketing practices, you’ll target customers residing in the area where you’re expanding — both on and offline. Some examples of location-based marketing strategies include the use of location-specific keywords and custom hashtags, and hosting, attending, or targeting events that will attract your target audience.
Furthermore, market segmentation can be used to sell new products and services to existing customers if you’re growing your offerings rather than expanding into a new geographic area. After you’ve segmented your customers, you can begin to market new products and services to the customers most likely to purchase from you.
The Bottom Line
The decision to expand your small enterprise is one you shouldn’t take lightly, and it’s important to keep these three considerations in mind before expanding into a new region, adding additional products and services, or franchising your business. A lot of time and money goes into growing and expanding a business, and you and your employees should be well prepared for the process!
Looking for expert tech tips and resources? Visit D. Greg Scott to find books, media, blog posts, and more!