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Expand your business into new markets.
You can grow your business by selling more things to more people, or fewer things to fewer people. But first, are you ready?
Offering more products or services.
Think about the overall impact of expanding your business. Can you do it comfortably? Will it cause you financial strife? Will it fit with the culture you’ve created? Answer these questions honestly before diving in.
You could expand your business by selling a wider range of goods or services. Of course that only works if people buy those extra things, so think through your decision.
Listen to your customers
Ask what customers want. They may suggest new things to sell. Or they may use your existing products and services in novel ways – which will give you marketing ideas.
Build on market trends
Read trade magazines and trend reports to learn what others are doing. Or look to comparable industries for inspiration. How are they better serving customers?
Reaching more people
You could expand your business by broadening your target market to give you a larger group of potential customers.
Go into new places
Expanding your geographic focus can introduce you to lots of new customers. You can keep selling the same types of things to the same kinds of people – you just have a bigger audience. But of course this will increase your marketing costs and may require you to open new shops.
Target new customer segments
Do some research to see who else would use the products and services you sell. You may be able to sell to a whole new set of customers without opening a new store or offering extra products.
It can cost a lot to expand business in these ways, so check that the returns will be worth it. Professional market researchers can help forecast the increased sales you could expect from your investment.
Choose your mode of entry.
There are a few ways to expand your business into a new market.
- Build: You can do everything yourself – whether it’s testing new products and services, developing new market segments, opening new locations, or setting up an online store.
- Buy: You can expand faster by acquiring other businesses that already do the things you want to do. You will see quicker results but of course the initial costs are generally high.
- Partner: You might work with a distributor or another business to try new things. This allows you to share some of the risk. But these arrangements can get complex and you’ll need a legal agreement.
Develop a niche market.
Rather than going broader, you may want to go narrower and develop a niche market. This approach can make your business the go-to for a specific category of products or services. You’re likely to face less competition, and you’ll become really efficient at what you do.
It’s worth forecasting the size of your target niche market before committing too heavily. It needs to be able to support your long-term growth goals. You may need to gear up to trade online as that allows you to service a niche customer base across a wider area.
Do you have the resources to expand business?
Expanding generally involves doing more. More sales, more customer service, more marketing, and more paperwork. Your processes, systems, and people will come under pressure. This is what it means to ‘scale up’. Invest in your business and develop the resources you need to grow.
Build and educate your team.
Growing your business may mean growing your team. You may need to develop a new layer of management and consider ongoing professional development for them. Having your team fully onboard with your plans will make growing your business go much more smoothly.
Things you should know.
The opinions expressed on this page are not necessarily those of Westpac and Westpac does not endorse or approve any goods or services to which reference is made. Westpac makes no representation as to the accuracy or currency of the materials, which are provided without taking your personal financial situation or goals into account. Westpac accepts no responsibility for the availability or content of any third party material to which this page may refer.
Any tax information provided in this webpage is general in nature and for illustrative purposes only; it does not constitute tax advice and should not be relied on for tax purposes. You should seek professional advice on the tax implications of your investments based on your particular circumstances. Westpac accepts no responsibility for the tax consequences of investments to you or any third parties.
Originally published by Xero. Find out more about Xero's accounting software for your small business.