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Expansion Strategies for Your Business Get Growing!Ideawala ideawala
January 28, 2009
When it comes to a business you must never rest on your laurels but must be
use your creative side to come up with expansion strategies. Some examples of
ways to do this include introducing a new product, market development, product
licensing, to begin a chain and to consider a merger or acquisition. Growth is
important but make sure you don’t become too enthusiastic and overdo a good
thing. Overdoing can be just as detrimental as under doing.
How Do You Grow Your Business? New Product
Use your creative side to come up with a new product that is in line with
what you are already selling. You do not want to introduce something old or
outdated but you never know when you might hit upon an excellent idea.
Extending the product line you already have is a good idea
but introduce new products slowly. You do not want to overwhelm your customers.
Do not create a whole new product that is unrelated to what you currently sell.
You will more than likely money from your existing customers than you will from
the new customers you acquire due to your new product. It is the Pareto
Principle or the 80/20 rule (sometimes written 80:20) at work. The 80/20 Rule states that 80% of your regular business will come by way of 20%
of your long term loyal customers. It is always good to look for ways to get
new customers as all loyal customers were once new customers but it costs five
times more to get a new customer than to hold onto one that you already have. Market Development Developing your market using innovative new designs or concepts is a smart idea
but do not exceed beyond your reach. This can overstress yourself, your
employees and can overload the system. Worst of all if you overspend on your
budget your company
Product Licensing Licensing your product carries some risks in a financial sense because the onus
of responsibility for the success of the product shifts from the creator to the
company that is going to market, advertise, produce and distribute it. While
you may lose out on profits in the short term, if the product becomes a
bestseller and garnishes a national reputation for quality, you will reap the
rewards in the end. Begin a Chain Certain businesses are easy to replicate in other locations and turn into a
chain. Examples of these include restaurants, bars, retail stores and a variety
of service businesses. It is essential to figure out why your original store
worked in the first place and what traits can easily transfer to a new store
and which cannot. You have to pinpoint if your initial success has to do with
your products or services, your location, yourself, your staff or your
marketing campaign. You start a new marketing campaign every time you open at a
new location to drum up new business. Merger or Acquisition Joining forces with another company can make both of your companies bigger and
better and can make you shine twice as bright! By doing this you expand your
quantity of customers, you will operation more efficiently because you have
more people to do the work, and you will increase your capital. It is vital
that you find a partner who wants the same things as you do from his or her
business however. Vision is extremely important or you could end up with
conflicts and rising tension that threatens to destroy the good work you have
both done.
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