Business expansions use similar planning methods as the original company.
The growth of a business will eventually include expansion. A business can expand by adding new products or services, selling in new locations or online, marketing to a new target client, franchising, or purchasing another business. Properly planning your business expansion is as important as the original business plan. Expanding your current offerings provides new opportunities for customers and employees. Approach your business expansion with thoughtful planning to ensure its greatest success.
Things You’ll Need:
Choose your method of business expansion. Decide if you want to offer related products and services, purchase another business, franchise your existing company, increase your geographic or online sales or target new clients for your existing products.
Evaluate your employees to determine if the existing workforce can handle the increased workload or if hiring more people is necessary. If you plan to purchase an existing business, evaluate the workforce at the new company to determine how the teams will work together.
Review your company’s organization. Ensure that you have proper systems and equipment in place to handle the increase in business that will result from the expansion.
Assess the financial stability of your existing company. Create a detailed financial assessment of the startup costs for the expansion. If possible, finance the business expansion with the current cash flow or identify a way to raise capital for the expansion, such as a bank loan or venture capitalist.
Prepare a marketing plan for the expansion. The plan should include the possible methods of advertising the new products, services or business through print, radio, online and social media outlets. Consider if marketing the expansion will affect the initial business.
Write a business plan for the expansion. The business plan should include a summary of the company, personnel and financial evaluations. The plan should also include the preliminary marketing plan for the expansion. The business plan can be informal if it is for internal use only. A formal business plan is only necessary if you approach a bank or venture capitalist for a loan. The business plan will be the road map for the expansion.
Tips & Warnings
Expand your business slowly to ensure the greatest success.Test your expansion product ideas by creating low-cost options that can later be mass produced.