The best tips for business expansion are to use analytics to explore new markets, and to increase business through diversifying into new areas of operation. Product development is a time-honored way to expand the capacity of a business. Subcontracting is another means used to increase business capacity. Depending on the nature of the business, a franchising strategy also may be a profitable endeavor. Forming partnerships or acquiring companies are yet other approaches to business expansion.
Employing the use of analytics in choosing new locations may ensure the long-term success of the new locale. By applying technology like geographical information systems (GIS), a business may develop a new site based on rich data that includes many layers of details on what type of customer would be likely to frequent the new location. Having a close match between a store's location and the company's target market usually gives a firm an edge over competitors in business expansion.
Enhancing a product line may be less capital intensive than expanding into new locations. Analytics may also assist a business owner in determining what type of product development might best dovetail with existing product offerings, as well as what might carry strong appeal for the company's customer base. Product-line expansion may also be less risky and require less capital investment than site expansion. This is often the case if the product already has the potential of strong appeal to the firm's existing customer base.
Diversification is another frequently used way to expand business activity. When a firm has developed an expertise in one area, along with a certain share of the market, a business owner may look to ways to replicate that success in new areas. Such activity is not without risk, and some businesses that have had stellar results with existing endeavors may fail miserably in launching new products. This type of business expansion generally involves a period of intensive research into what kind of reception may be expected for the new product line.
Some businesses need additional help to meet seasonal demands for increased productivity. Subcontracting is a time-honored technique that allows for temporary business expansion. Larger companies may enjoy a greater capacity to take on lucrative contracts through the ability to subcontract aspects of the work.
Another tip for businesses looking to expand is to explore the possibility of franchising. For example, a company may experience a measure of success in a certain model of operation, like a restaurant, located at a single site. This idea may be suitable for expansion through offering franchises to interested parties.
