In the previous section, we focused on making changes or improvements to your product as ways to continuously improve your business. There are also larger scale business moves that can be made to do this, such as changing or adding locations and forming partnerships. Here are the most common strategies related to location and expansion that are used to improve business.
Move
Sometimes a new location will make your business more visible in the community. It is possible when you started that you could not afford a large space, but now that you are successful and able to put money back in the business, you can afford a better location and more space. More space may also allow you to expand your operations, giving you the ability to handle more customers. Moving is expensive, so don't do it rashly. However, it can often add a freshness that is just what your business needs.
Add Other Locations
Convenience is always a factor for customers. For businesses where customers need to visit in person, having more than one outlet around town can draw a broader range of clientele. For manufacturing businesses, having more than one location can provide you with back-up operations and convenience to suppliers.
You need to consider exactly what makes the original business work and what won't easily transfer to a new site. Ask yourself how much of your current success is tied to you, your location or your staff. If you do take this step, define operating procedures completely. Share staff between locations to help start things off on the right foot.
One of the easiest ways to add another location is to expand to the Internet. Having a web presence broadens who you can reach with your product. The essential factors with this strategy are to develop a very good website that is user friendly and to have a good distribution system in place.
There are many economic forecasters who predict that any business that does not have a web presence will be out-of-business in the foreseeable future. Even something as simple as a single page with contact information makes a huge difference. Many people rely totally on the Internet to find what they want - even from someone in their own neighborhood that provides a service they need. The Internet is replacing the yellow pages and the newspaper as a place to find a product or service. Having a web presence is one of the most valuable tools your business can have.
Franchise Your Business
It is possible that you have a successful business that you know others could be successful at operating, too. Franchising your business gives you the opportunity to make money off your business model. Once you get past the initial start-up costs, franchising is a great way to expand your business while spreading the risk across multiple owners.
A franchise is essentially a legal agreement in which a business owner, the franchisor, authorizes another entity, the franchisee, to use the franchisor's business name and ways of doing business in a location for a fee or a share of the franchisee's profits. Franchising can be a useful way to grow a business and expand market share without being solely responsible for all of the financial risk and management.
Make certain that there is a market for your product and that you have sufficient financial resources to get through the initial period. It is worth paying for the market research to do competitive analysis. As with licensing, it is critical that a competent business attorney be involved so that all your legal bases are covered.
Form Strategic Alliances
For small businesses, strategic alliances are a way to work together with others toward a common goal while not losing individuality. A strategic alliance is essentially a partnership in which you combine efforts in projects ranging from getting a better price for supplies by buying in bulk together, to building a product together with each of you providing part of its production. The goal of alliances is to minimize risk while maximizing your leverage and profit.
An alliance is simply a business-to-business collaboration. Alliances are formed for joint marketing, joint sales or distribution, joint production, design collaboration, technology licensing, and research and development. Relationships can be vertical between a vendor and a customer, horizontal between vendors, and can be local or global.
Merge with Another Business
A merger combines two companies with the goal of expanding your customer base and developing operational efficiencies. Such a step usually happens between established companies, but it can also work through the acquisition of a bankrupt company selling similar products. The bankrupt business may bring a loyal customer base or manufacturing facilities that can give you the step up to operate at the next level.
A merger includes preparation and initial negotiations, due diligence, the sale and purchase, and portfolio transfers - all involving financial, legal and human implications. It is not a process that one undertakes lightly. Putting two separate businesses together with different corporate cultures and styles requires some real commitment, but on the plus side, the resulting synergy can bring a new, profitable direction to your business.
Go International
We now live in a world economy. Perhaps the market for your product has become saturated here. However, there are plenty of places around the world where your product would be in high demand. It is not as intimidating any more to do business anywhere in the world.
Doing business internationally can be exporting, licensing, or a joint venture. You can expect the same basic business principles in assessing the market, having solid legal and accounting support, protecting intellectual property, and obeying regulations to apply. The big difference is how business is conducted in other cultures. In some countries, particularly those in Asia, a local partner is essential. The target country's economic development agency should be consulted before taking any steps. They help find local resources to get you get started.
You can use any of these strategies whether you want to stay small or decide you want to grow your small business into a much larger one. You are not limited to just one strategy either. More than one can be tried simultaneously or different ones can be spaced out over time depending on what is happening in the market. That is one of the most fun parts of running a small business - mixing up your strategies as the marketplace changes. One of the huge advantages that a small business has over a large one is that nimbleness to adapt. Perhaps that is why small businesses are always the ones to lead the country out of a recession. They can adapt quickly, and find new ways to continue to survive, improve, and succeed.
