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How To Expand Your Small Business
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Article 5: Expansion Factors To Consider
Often when a business considers expansion, the first option that comes to mind is to open another location in the same general area. Other times, it’s appealing to consider opening branches clear across the nation.
There are pluses and minuses to both options.
With any expansion, careful research, planning and number crunching are vital. Since you already have good data from your existing successful business and already have a sound strategy outlined in your continually updated business plan, you’re probably something of an expert on the local setting. This is a plus.
Of course, if you don’t have a business plan or haven’t kept thorough marketing and sales records, opening another outlet a mile away may be as problematic as opening an outlet on the dark side of the moon.
And just because you’re an expert on the local scene, doesn’t mean you necessarily know Mississippi from Massachusetts. An entirely different locale can have entirely different demographics, markets and competitive conditions.
Here are some factors to consider when expanding in the vicinity or cross country:
A new, tailored business plan is a must. Don’t assume that your existing plan is an automatic fit for a different location, even if that location is nearby. Use the existing plan as a template to customize a plan for the new location. Know how the community and market is changing. Opening an expansion skateboard shop in an aging community probably isn’t a good idea. Evaluate the competitive situation. Your present flower shop may be blossoming because there isn’t another florist within 10 miles. Is that the case where you’re hoping to expand? Be prepared to find personnel or to train existing employees to duplicate the successful operation of your original location. Take a lesson from franchising. When you find a system that works, replicate it, don’t reinvent the wheel. Don’t jump at every opportunity. Snapshots in time may be distortions. Look for patterns over time that trend in the right direction.
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