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Is It the Right Time to Expand?

Business

Is It the Right Time to Expand?

Expanding your business is an important step in its lifecycle. You begin small and tightly focussed – a limited inventory, perhaps a single product or service, with a small team, serving a very specific market, in one country or even just in one city. This means your business has a very clear identity but is also deeply reliant on that small market and that specialised inventory. If a competitor moves into town, the tastes of your market moves on, or the financial conditions that put money in your customers’ pockets change, then you find your revenue stream drying up almost entirely.

Expansion makes you more stable: you’re no longer reliant on that small group of customers; that single location; that limited inventory, and if tastes or conditions change, you’ll have multiple streams of revenue from different aspects of your expanded business that can help to keep you afloat until you can adjust.

Expansion isn’t always the right choice, however. Sometimes, if you’re not ready or the time isn’t right, you could find yourself pouring a lot of your resources into growing your business by launching a new product or pushing your brand into a new market only to find you’re not prepared. This is, necessarily, a public failure: a store opened that no-one goes to, a product launched amid a blaze of publicity that no one buys. This kind of public failure can do immeasurable harm to a brand: customers trust you because, ultimately, you appear to know what they want. If you demonstrate, very publicly, that you don’t, you can lose customers.

Identifying the right time to expand isn’t always easy but there are two primary areas you can look at: your business and the market conditions you’re expanding into. Understanding the latter, while setting your own targets for the latter can help you expand at a time when you’re more likely to succeed!

In terms of setting your own targets, you might want to ensure you have a certain amount of money banked before pushing ahead with expansion plans, ensuring you can fund your new effort until it’s able to start paying its way. Work with a business advisor to come up with different ways to you can be ready for expansion and work towards them.

Understanding your market often takes expert help. Gathering the sort of comprehensive international research you need to feel confident about expansion is beyond the scope of most small- or mid- tier businesses. Partnering up with a market research firm can get you the knowledge and insight you need to make informed choices about expansion that can propel you toward success.

 

I am the founder of Startup Today. I am the main writer and have put in many hours of work into creating this blog. If you want to find out more about me then lets get in contact.

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