Expansion strategy is a process adopted by a company when trying to achieve a high growth level as compared to its previous achievements. Like every other small business owner you want your small business expand into a large business. There are many ways to expand your business, but here are two major business segments where you need to implement strategies on.
Decide on Expansion Strategies
There are two major types of growth strategies, which include internal growth and external growth.
- Internal Business Growth Strategy
This type of strategy include the redesigning of existing products/services as well as development of new products/services. This strategy uses business’ internal resources only. This strategy include expansion of business, modernization and diversification.
- External Business Growth Strategy
External growth strategy or integrative growth strategy is another part of business growth strategy where two firms combine together to form a large enterprise and expand their business operations. This strategy include merging with other firms, acquisition, joint ventures as well as strategic alliance.
Business Expansion Advantages
The greatest business growth advantage is the ability to maximize the economies of scale. By increasing your production, you can reduce per unit costs and save from purchasing inventory by getting discounts on buying in large quantities. Another benefit of business growth is that you can spread the cost on your marketing efforts and you can also increase the number of worker for a larger output.
Small business growth can also allow you to increase your stock and other business related resources. You can generate more sales and profits by implementing growth strategies. It also can help you to invest more cash into your business. If you are looking to get new customers and want to reach new markets, business growth strategies can help.
Business expansion give an impression of greater financial viability of the business. Normally lender prefer to fund larger businesses than smaller ones.
Business Growth Strategies
Business expansion process starts with a comprehensive, well planned, actionable strategy. To cover the basics, consider incorporating the following methods into your plan.
- Do Your Market Research
Market research is the first step towards developing a strong growth strategy for your business. Primarily, you need to determine what you actually want to know about your market. Prioritize the results of the first step. Know your target market. What are your customers’ requirements, preferences as well as their ideology about your products? Then find out what will make them buy from you? Analyze your competitors and look what they are doing.
- Expand Your Product Line
Methodical expansion of your product line is an excellent way to expand your target audience as well as business. Review your existing offerings and start searching for new ideas to uncover additional business’ growth opportunities.
- Create New Sales Plan
Your sales plan is your business strategy that sets out your target sales and strategies for your business. Basically it lays out your objectives. So sit with your sales executives and create a new sales plan that works for your business. Usually the sales plan include your target customers, revenue goals, promotions and pricing, available resources, team structure as well as the overall market condition.
- Longer Customer Retention
Create a plan to retain your existing customers as getting new customers costs you more than keeping the existing ones. Develop a strategy that can help you retain your existing customers and getting them to make more purchases from your business.
For more guidance on learning about your customer retention, give this a read: 5 TIPS TO IMPROVE CUSTOMER RETENTION FOR BETTER HOLIDAY SALES
- Sail into New Markets
Sail into new markets to explore expansion opportunities for your small business. The first step that you need to take is to define your target market demographics, and location after that carry out a market research for your products and services. Use systematic approach to find a new markets.
Depending on the size of your, your expansion efforts will based on how you utilize your resources. Using these tactics, you can effortlessly expand your business into new markets and gain more customers as well as profits. So what are you waiting for? Take your first step towards your business success!
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