When asking nearly any CEO of a small business about what they hope to achieve in the long run for their company, the majority of them will likely shoot to make it in the Fortune 500, of course, and perhaps even try to climb up that ladder of success to eventually reach an international level.
However, there is an array of serious factors that must be addressed before you and your company can think about expanding to cover new areas. Firstly, why it is that your business is expanding? Is it grasping at straws because sales are down, or maybe a new competitor is encroaching? Is it because it’s the next logical step in an overarching business plan?
The challenges associated with expansion are mighty; you’re essentially starting a new company--albeit, with a good degree of experience--into a new area, where they are likely unfamiliar with the services your company can offer.
New “kid” on the block
Imagine that a new tire shop rolled into your town, one that’s much closer to the shop you go to. Yes, you’ve seen it, and you know what it does, but that’s about it. In the end, you know that when you need a new set of tires, you’re going to go to the guy you’re already familiar with, even if his shop is out of the way. Know that when your business expands to a new location, you will be the new shop that opens up, the one that no one really knows or cares about.
There lies a new challenge: engaging locals and convincing them that your product or service is worth paying for, and that you are an expert in your field, worthy of their trust.
Risk vs. reward
Expanding a business isn’t just difficult to do: it can be a serious risk. Everyone in the company--no matter the size--will feel the additional pressures that come along with the planning and logistics that need to be hammered out before anything can be set in motion. This is just the tip of the iceberg: once the expansion process actually begins, that pressure mounts. Staff turnover because of added stress can be a real issue, and managing staff can suddenly find themselves to be operating reactively, as opposed to proactively.
The quality of products/service will justifiably suffer if these two problems rear their ugly heads, and all of a sudden the expansion has stalled. Red tape and local politics can get in the way, especially if your business is expanding to a new region or country. Language and culture can only compound these matters.
Despite the risk…
These have all been worst-case scenarios. Go back to why you are moving: if you have a successful operation going on in one area, there’s no reason why it cannot be possible to replicate in another. The opportunity for additional sales can not only offset the costs of opening a new location, but they can change opinions in favor of your business.
New technology has made it possible that companies can establish a presence in a new location without having to go anywhere. Setting-up a local toll-free phone number, and having all the calls it receives to an already-established line will open up new avenues for communication and sales in the new location. As Russel Cooke mentions on VirtualPhone-Number.com, “ It’s advances offer such benefit to business, it’s implementation in the mainstream marketplace is practically inevitable.”
Risk dictates that expansion isn’t for everyone. Risk is ever present in everything that we do, however. What it comes down to is how well you know your company, and its prospects for expansion. Will it fail? Only time will tell. But until then, focus on making it the hardest-working, most responsible business you can. Once that happens, growth is inevitable.