According to a CIBC poll conducted this summer, 85 per cent of Canadian small business owners feel optimistic about their potential for small business expansion. In fact, of those polled, and despite our slow economy, 43 per cent say that they plan to expand within the next three years. But is it the right time to invest in expansion?
Things to Consider Before Expanding
Every small business expands in a different way. Some launch new products, while others simply increase production. They may expand through marketing initiatives locally, exploring previously untapped markets, or grow globally, sometimes through the use of the internet. No matter your method of expansion, consider your goals every step of the way.
The number one reason small business owners wish to expand is to increase their profits. Expansion doesn’t always mean more money, though. In fact it can often mean working harder for the same income, as well as additional costs. Before expanding, really consider whether or not it’s affordable at this time.
Compare The Category
Look around you; are your competitors expanding? If so, are they doing it well? Could you learn something from their efforts? Expansion isn’t for every small business. Sometimes the fact that you’re small is the very thing your customers are drawn to. Finally, consider having over the reigns? Keep in mind, expansion sometimes requires hiring someone to run your company as you’re tied up with the bigger picture.
Create Your Expansion Plan
So you’ve decided to grow your business – do you have a plan? You should! Just like you carefully planned the launch of your business, you should just as painstakingly strategize each stage of growth. Once you have an action plan, it’s that much easier to put it into action. Here are some of the ways you, the small business owner, can expand:
- License a new product
- Target new markets
- Expand globally
- Expand on the internet
- Open up a new location
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According to the CIBC Canadian small business owners poll, the following were ranked as the top ways to expand:
- 46 per cent: Increase capacity/production
- 41 per cent: Increase marketing initiatives
- 39 per cent: Expand into new markets within Canada
- 30 per cent: Introduce a new product
- 25 per cent: Expand their business outside of Canada
- 21 per cent: Make a strategic acquisition
A word of caution: take it slow and watch to see what others are doing. Of those polled, 59 per cent of respondents who said they were planning on expanding were in the start-up phase. On the other hand, only 34 per cent of established business owners planned to expand. While it’s good to be eager and excited about growth, you really want to get to know your business as it is first – then consider moving forward. The most successful businesses are those that take their time to fully understand the market around them and how exactly they fit into it.