I hope you enjoy reading this blog post.
I hope you enjoy reading this blog post.

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4 Low-Risk Business Expansion Strategies

Business owners who jump straight into business expansion without strategic planning often end up losing tens of thousands of dollars, money that can be put to good use otherwise. And the sad part is that they get burnt during the process or resent their business partner for not doing enough to keep the business afloat. 

 

Business expansion is an essential part of business growth, and every progression carries risks and requires money to sustain, for examples, outgoings to pay, payroll to support, lease set-up costs, and other advisory costs to bridge the deal.

 

However, with proper due diligence, business expansion is possible. Here are 5 Low-risk business expansion strategies to help expand your business. 

Strategic Planning

Don’t skip this process. You need to have an intense focus group meeting with your business partners and team members to address all the What’s, Where, How, and Why questions because it will save you tens of thousands of dollars by mitigating risks and avoiding unnecessary expenditures.

 

In fact, simply by investing a solid 50 hours of deep-dive planning & analysis about your expansion trajectory is far more beneficial than a haphazard close-door 1 on 1 discussion with your business partner(s) over the course of 6 months.

 

The point is to involve your key staff members and invite them to contribute. Your staff are the front line that deals with everyday operational and customer issues and will assist in shedding some light on preconceived ideology. 

 

Remember, not all business expansions are consistently profitable. You must perform strategic planning before you pursue your plans.

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Use your equity

Test the water with your equity before you use other’s people money: Lenders, banks, private equity.

When you use other peoples’ money, you don’t feel the pain, and your Ego might come into play by overspending, over-committing, and over-denying on its profitable opportunities, hence when you use other people’s money, it’s easy to be in denial and prolong the inevitable, which is, to accept that the business isn’t profitable. By the time you pull the plug to end the expansion, you might already accumulate more debts and interest than necessary. 

On the contrary, when you use your own money, it hurts when you are constantly at a loss month after month. It will force you to become more practical, logical, and impartial when assessing the “opportunity” of the lifetime when you start paying the bills. Ultimately giving you the courage and confidence to pull the plug within a reasonable timeframe before the project begins to digest all your funds and equities.

, 4 Low-Risk Business Expansion Strategies

Ensure the Value exceeds the price

Whether you are starting a new office (branching out) or introducing new products and services (P&S) to a new marketplace, you need to ensure the Value of your P&S exceeds the price so that you can quickly support your business expansion.

I know it is tempting to charge the market rate on your existing model, but if you want to play it safe, it is best to price your P&S below its perceived VALUE to secure your market share – it is a temporary strategy.

Customers are always looking for Value, and if the price doesn’t justify their perceived Value, they will go elsewhere. 

One way to ensure VALUE exceeds the price is to communicate with a 10X value proposition on all aspects of your business’s offers, services, and products. If you can justify that the Value your customers get is 10X more than what they will pay, chances are they will buy from you. And if you apply this technique to your business, you will see consistent transactional Growth to your business.

Overall, continue to offer excellent service or incredible products at great prices— but keep in mind to ensure the Value they get is 10X more than they pay for it.

, 4 Low-Risk Business Expansion Strategies

Maximise social media

Next, you should focus on maximising your social media. If you have a Facebook page, Twitter account, or Instagram account, you should use all those community media to get the word out about your business. And if you don’t have an account yet? It’s easy to create one!

In fact, to play it safe, you can even use your social media to test the water before any launch or expansion: to see how receptive your customer base would respond when you mention your new office location (new branch) or introducing new products/ Services 12 months before the launch. To test the water on a new market, you can create an Ad campaign and attach a freebie to collect interest and prospects.

We can think of no reason you shouldn’t use social media to promote your business. With the help of social media, you can attract new customers, reach out to existing consumers, strengthen bonds with those you already have, and give back to the community that has supported your business in the past. It’s also essential to stay competitive in today’s market, where people can get their information from anywhere at any time – so being present on social media is crucial if you want low-risk expansion strategies. 

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ABOUT THE AUTHOR

Victor Kon

Victor Kon is a “business builder” entrepreneur, trusted business advisor, and catalyst to your success. He helps entrepreneurs optimize, automate, and grow businesses that can run without heavily relying on sweat equity. With over a decade of experience running successful businesses in a multitude of sectors, Mr. Kon now utilizes the expertise he garnered in those endeavors to help others achieve the same success in their own ventures.
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