Part 5 - Expanding Your Business
If your business is successful, at some point you're going to feel pressure to expand. Pursuing growth can bring many rewards, including new challenges and financial gain. Some good reasons to take the next step include market demand, competitive positioning, greater profitability and a desire for personal and employee development. There are also risks. Beware of red flags, including lack of capital, market uncertainty and a lack of personal readiness and management competencies.
This section looks at ways to expand your business, and presents information resources that can help you manage your business through the growth phase.
"One of the biggest mistakes people can make is to move forward without clarity. So often businesses expand and in the process dilute what they do. The minute you dilute, you diminish your branding and that's bad for business. Stop and really think about whether or not you want to grow and plan your growth with purpose."
"Listen to customers, and watch the trends. It's that first hand interaction with customers that will guide you in steering your business."
Kokimo Candles Lt.
"Love your business, but don't fall in love with it. Someday it may get so big you won't be able to manage it yourself and you'll have to give up control. You may even discover you're not the best qualified person to lead it to the next level."
Xystar Technologies Inc.
In many ways, expansion is like starting out all over again. You'll need to:
- develop a new business plan and new sales and marketing strategies
- go after more financing
You're also likely to have to:
- hire more employees
- find larger premises
- acquire more equipment
On the plus side, all that will be a bit easier than it was the first time around because you have an established track record and a lot more business experience.
But as well, you may have to:
- create new products or services to satisfy your customers' demands
- travel more to develop and serve new markets
- be involved more in management--which may mean doing less of what you have been doing
And, for sure, you can count on working even harder than you are already.
So, the question is: is expansion right for you? Are you up for all the new demands it will bring? Are you excited by the prospects? There's no law that says you have to expand, so if you'd be happier to keep things the way they are, that's a good decision for you.
At the same time, you should be aware that many successful businesses take on lives of their own which can mean you'll be forced to expand. In that case, you can either manage the expansion yourself or find someone inside or outside your company to take the business to the next level if you lack the desire or skills. Your other option would be to sell your business to someone who's interested in growing it.
Once you've decided to take your business to the next level, it's a good idea to start your growth planning process with a SWOT - strengths, weaknesses, opportunities, threats - analysis to ensure the drivers of growth are visible and your goals are crystal clear.
As part of your planning, consider these options for pursuing growth:
- Diversify your products or services. This could include spinning off new things for existing customers or creating new products or services for new market segments. For product-based companies, it may require purchasing new equipment. Look for opportunities that make sense and that relate to your core competencies.
- Establish partnerships. This can be an effective way to grow further and faster. Partnership options include strategic alliances joint ventures, distributors/agents, and franchising. The key is finding the right partner, completing your due diligence and having strong written agreements.
- Expand internationally. Exporting opens the door to whole new markets and a potentially untapped customer base. The keys to success include assessing your export readiness, doing proper market research and developing a good export plan. There are many resources available to help businesses grow globally.
Get in touch with Ontario Exports whose international trade specialists can help with:
- export education and counselling (check out its Ready to Export
- market information and intelligence
- product promotion and market contacts
Through Ontario Exports, you can also attend seminars and workshops and participate in either outbound trade missions to different markets or join virtual trade missions to connect with international buyers without having to leave the province. Other good resources to help you tackle export markets include:
- Canada Business for helpful tips on preparing, researching and entering world markets.
- The Canadian Trade Commissioner Service for a range of support, services and programs.
- Export Development Canada (EDC) for insurance, financing and export market intelligence
- Business Development Bank of Canada (BDC) for consulting services and financing to help build a global presence.
And be sure to check out these five steps to exporting recommended by an award-winning entrepreneur who is successfully selling around the world.
What a Small Business Enterprise Centre manager says about exporting:
"Take advantage of the global marketplace. The Internet and increasing acceptance of online payments make doing business globally easier than ever before. But, remember, when you start going further away from home, you need to do a little more homework and protect yourself."
Trudy Belanco, Manager
Brantford-Brant Business Resource Enterprise Centre
If you're ready and eager to expand, our Business Advisory Services can help you assess your current situation, develop your future plans and connect you with the right people, information and business resources.
Specifically, these services can
- help you identify and overcome potential barriers to continued growth
- help you develop partnerships with leading financial sources and other professional services
- provide public- and private-sector information and contacts to help you manage growth-related issues
- provide opportunities to develop new business and strategic alliances
- direct you to key marketing and export resources and help your firm become export-ready
Business advisory services are offered through 12 offices in southern Ontario. In northern Ontario, they are offered through the Ministry of Northern Development, Mines and Forestry.
To find out about the growth strategies and tactics of successful, fast-growing small and medium-sized firms, check out the Leading Growth Firms Series of Reports.
What Small Business Enterprise Centre managers say about expanding your business
"Learn the skill sets of how to manage growth and human resources when expanding. And take advantage of the Small Business Enterprise Centres and many government programs available to help businesses expand and to explore foreign markets.
Sandra Tam, Manager
Markham Small Business Enterprise Centre
"It's important to plan for growth so you have the structure in place as opposed to growing and trying to build the structure behind. When considering your options to expand, think beyond Ontario and explore growth in other markets. If you are a manufacturer, this will reduce your dependence on our domestic market and your vulnerability in the face of the increasing competition coming from offshore."
Trudy Belanco, Manager
Brantford-Brant Business Resource Enterprise Centre
"Examine where you sit financially and what is appropriate. Ensure you have the capacity - both the human and financial resources - before expanding. Plan for it!"
Jane Phillips, Manager
Business Enterprise Centre Owen Sound
Expanding your business: wrap-up
Growing your business can be exhilarating and rewarding. Bear in mind that it is also demanding and typically brings higher stakes, longer hours and additional stresses that can affect your health. In order to avoid burnout, it's important to be able to let go and delegate, which can be very difficult for many entrepreneurs. It's equally important to seek a work-life balance. Don't forget to find time for family, friends, hobbies, exercise and vacations.
A seasoned entrepreneur shares this insight:
"It's important to do something to keep yourself centred and focused. My secret to maintaining work/life balance is to do an hour of yoga meditation each morning. After all my years in business, that's probably the biggest gift that I give myself every day now."
Your growth journey will bring many ups and downs and that's where a strong network of personal and professional support comes in to smooth out the ride. Along the way, tap into the Small Business Enterprise Centres, Business Advisory Service Offices and many other resources available to help businesses like yours grow and expand. And nurture relationships with other successful and like-minded entrepreneurs to share your challenges, get advice and celebrate your successes.
Here's to experiencing growth beyond your wildest dreams!