If you’ve been considering expanding your small business, there are generally a lot of factors to think about. From leveraging technology and optimizing processes, to exploring new markets, and securing funding, this guide will equip you with practical tips to help scale your business.
Time to expand
Expanding your business is a huge decision. Without expanding, a successful business risks being left behind as the market changes or competitors increase. However, expanding your business may mean putting in additional work, hiring new employees, and seeking additional funding to cover the increased costs.
Before you decide either way, you want to be sure your business is ready for growth. It may be time if several of these factors are true:
- You have a loyal customer base
- Customers are asking about growth
- Your business has been profitable for at least three years
- You have a dedicated team
- Your industry or market is growing
- You have steady, positive cash flow
- You have operational systems, like business software, in place
- You are literally running out of room
If expansion is in the cards for you, we have tips to help you grow.
The right technology will not only help you to manage your business, but may be very useful for expanding it as well. There are multiple software tools you can use for business operations including accounting, project management, office communications, sales, customer service or customer relationship management (CRM), and marketing.
Customer relationship management (CRM) software may be particularly useful when expanding. CRM software helps manage all of your customers and prospects, from initial interactions to established business relationships. A CRM system provides an overview of the status of customer deals, simplifies sales and marketing processes, and may even improve profitability. When expanding your business, a CRM system may give insight into a particular location or demographic that could be lucrative.
While it can feel overwhelming to select software solutions, the right tools may ultimately streamline your processes and drive business growth. For more, check out 12 Best Small Business Apps to Download.
Optimization processes may help businesses improve efficiency and enhance productivity. Business optimization is important for expansion because it may also help you maintain cost-effective operations and stay competitive with other similar businesses. Developing these processes may lead to growth and be especially useful when expanding your business.
Some components of business optimization process include:
- Analytics: Information or data that may help businesses make informed decisions.
- Audits: Examinations and reviews of a business’s operations that may help eliminate redundancies.
- Goals: Provide clear targets for what your business can accomplish with an organized business plan.
For more information, check out Indeed.com’s® 10 Steps for Improving Business Optimization.
Exploring new markets
A new market may mean offering a new product or service, or physically moving or opening an additional location in a new market-area.
Businesses typically expand into new product markets to improve their business in one or more ways. Examples include to level the playing field with competitors who may have already expanded their product lines, grow their customer base, or satisfy demands and growing needs of their existing customers. A business may move or open an additional location to appeal to a larger market or different demographic.
Before expanding into a new market, you should consider reviewing your current business model and target audiences and look for opportunities. Think about the future goals of your business and where you want it to go. Research competitors’ services and products and what makes them stand out. Complete market research and use it to help you identify at least one new target market that best aligns with your business goals.
It may also be helpful to get feedback from your existing customers before expanding into a new market. Ask your current customers what products or services they want to see from your business. You may consider setting up free or low cost surveys or emails to gather their feedback.
And be sure to establish a budget and timeline for expanding into new markets. The timeline may depend on your budget, manufacturing costs, hiring needs, moving logistics, and marketing materials.
If expansion is right for you, securing additional capital may help you grow your business. SBA (Small Business Administration) loans, bank term loans, and lines of credit may all be useful financial tools for expanding your business.
SBA loans are government-guaranteed loans typically made available to eligible U.S. entrepreneurs through banks and other financial institutions. With great rates and longer terms, and low monthly payments, SBA loans offer excellent value for small businesses needing funding to grow. Funds may be used in a number of ways that may be useful when expanding including hiring employees, purchasing equipment, and other operating or inventory expenses.
A bank term loan is another option that may be right for you if you are looking to secure funds quickly, while locking in a favorable rate. Bank term loans may also be used for hiring employees, purchasing equipment, marketing, construction, acquisitions, and other expansion related costs.
A line of credit may be beneficial if you aren’t exactly sure when you will need extra capital for expansion. A line of credit gives you access to funds when you need them. You decide when and how to access your capital and your interest-only monthly payments are based on the amount you actually use. Funds may be used for hiring, acquiring inventory, financing upcoming projects, or to take advantage of a new business opportunity that you may not have anticipated.
For more information, review our article on Choosing the Right Financing Option to compare these options in more detail.
Your partner in expansion
No matter where you are at in deciding to expand your business, or which financing option may be right for you, SmartBiz® is here to help. We are proud to be the leading financing platform connecting small businesses with SBA, bank term loans, lines of credit, and other flexible financing options.
Our online lending network matches you with the right bank or lending partner to fit your needs and goals. Our experienced financial professionals are ready to help you every step of the way. See if you pre-qualify for up to $500,000 within five minutes with our streamlined application. Get started today to explore tomorrow’s opportunities.