Growth is always a priority for a business owner. It has so many advantages. In the short term, it gets more money into your business, which is always a good thing! In the longer term, growing to success in more markets with more products and more customers gives you stability.
Staying Small = More Vulnerable to Change
With a small customer base and a revenue stream predicated on one stand out product, you are dependent on the specific conditions that spawned your business and made that product profitable in the first place enduring. If your customers move on, your product is superseded or the economic conditions that gave people the money to spend on your change, you could be left leeching customers and money.
Spreading your base means you have a better chance of enduring those shocks and changes. If your customers in one market move on, those in another market provide a cushion while you work out how to attract them back. If trends move on from one profitable product, you can lean more heavily on the rest of your line.
That said, it’s not always a great idea to seize every impulse for expansion. If you’re not prepared, ready to weather the challenges that growing your business brings, then it could have catastrophic effects on your core business.
Growth is costly and risky: if you can’t make it a success you run the risk that will ultimately damage the foundations of your existing business, and the reputation you’ve build up.
Preparing and Planning for Growth
The sort of preparation and planning you need to do varies based on the sort of expansion you’re looking at. Adding a new product means surveying your customers to ensures you’re adding something that meets their needs and won’t be wasting resources stocking something that won’t find an audience.
If you’re planning to break into a new market abroad, you need to ensure you commission and take account of international research about the foibles of that market, from the trends affecting customer behaviour, to the amount of money people spend on comparable brands and the rules and regulations governing your industry.
Are You Ready for Growth?
You’ll need to make sure your business is ready to go before you expand, especially financially. Set some targets for yourself: a certain level of footfall or revenue in your core business, a certain amount of money in the bank or available through financing.
Budget appropriately too: make sure you can resist the urge to ‘lean in’ – if your expansion plans aren’t working out, be ready to withdraw gracefully, not risk your business!