Is the market you currently serve reaching a saturation point? Are you tempted by offers to blend your company with another synergistic small business? Do you see untapped opportunities in other countries? Have you gotten bored with selling the same set of products to the same narrow market?
If you’re asking yourself any of these questions, you may be thinking about branching out from your core business. There are many ways to accomplish this. For example, you can create a subsidiary business; sell into a peripheral market merge with another company; or move toward taking your business global.
The following is a roadmap to the different paths you can take to grow as a small business owner:
Discovering a new audience
There are multiple approaches to reaching a new audience. Some examples include; repackaging existing products and services for a younger or older market, expanding to an adjacent geographic area, or selling via a new channel such as mobile and social media. If your focus is on expanding geographically, make sure you analyze the size and buying preferences of the market, as well as any geographic barriers that might affect your transportation costs or store traffic. Similarly, if you are considering expanding to the web, ensure your brick-and-mortar business complements (rather than cannibalizes) the e-commerce site. Further, you should educate yourself about search engine optimization and web site analytics so you can be sure that your site will reach a prominent position in web searches.
Finding a strategic business partner
Rather than constantly looking over your shoulder to see what your closest competitor is doing, you may want to consider a temporary strategic partnership or, if all the stars align, merging your companies. In addition, you might consider gaining more control over your supply chain by buying a key supplier. In either case, don’t forget to blend potentially disparate corporate cultures and technology systems; retain customers and employees; and to proactively perform due diligence audits of any legal or environmental issues you might be inheriting.
You may have a product or service that has even more earning power in overseas markets than in the United States. If so, you may want to consider a gradual global expansion. Don’t hold off for fear of excessive costs. Selling overseas requires a minimal investment at the outset, particularly if you start with only one or two strategically chosen countries. You may want to consider hiring a local manager or work through a distributor, particularly in countries where English is not the primary language. Conversely if you have a web-based business or the budget for frequent airline travel, you may be able to manage by yourself.
Heading off the beaten path
Although it is not practiced as often today, true diversification still has a place in today’s business world. You may find that you are interested in more than one type of business, all of which can be branded under the same basic name and housed under a holding company. Another way to diversify is by creating an add-on business, e.g. teaching classes, writing articles or giving presentations related to your products or services.
Expanding your business can take months or years, depending on the path you choose and how large you want to grow. Remember though – it’s not only about the destination. Make sure you enjoy the journey and learn along the way.