Business expansion is the dream of many entrepreneurs; this way, it is possible to serve more customers and increase profits and the company’s scope. However, you have to be calm and plan everything carefully.
First, it should be understood that only some companies are ready to expand. It is essential to have well-established pillars, such as a qualified team, quality products and transparent processes. With this, growth will be healthy and could lead the company to bankruptcy.
It is still important to consider other factors, such as competition, new consumption habits and opportunities that flourish in the external environment. With all this in mind, we have created this article for you. Here you will understand how to plan a healthy business expansion. Continue reading our content and stay on top of the subject. Good reading!
Be Clear About The Type Of Expansion
There are many ways to expand a business. It is possible, for example, that the intention is to open new business units. In each model, unique challenges must be overcome with good strategies.
Check out some types of expansion:
- in business units;
- in sales channels;
- in product mix;
- on the types of customers served.
Another example is the expansion of sales channels, aiming to bring the company closer to customers. For this, it is necessary to build an omnichannel business which integrates the physical and virtual worlds in customer service.
By defining the type of expansion, it will be possible to determine the most effective tactics, create objectives and goals, and limit the indicators used.
Assess Market Opportunities And Threats
In expansion, it is crucial to assess the external environment and understand your main opportunities and threats. In this way, it is possible to create a current and realistic plan capable of taking advantage of external variables for the company’s benefit.
It is common to divide the external environment into two large blocks: the task environment and the macro environment. The first comprises everything close to the company, such as customers or competitors—the second concerns general aspects, such as the economy or market trends.
Manage The Team And The Fear Of The New
Any expansion involves work teams, whether in the product mix or the number of business units. Professionals are essential for everything to go well; after all, they are the ones who take the plan off the paper.
However, one factor must be considered: the fear of change. It is expected that in periods of growth and, consequently, restructuring, professionals are afraid of being fired or, in some other way, harmed.
Plan in advance how news of the expansion will be conveyed. Make room for clear and transparent communication in which professionals can clarify doubts and participate in strategic planning.
Align The Leadership Of The Enterprise
In parallel, all leadership must be aligned on future goals. Each leader must commit to the idea of expansion, motivate their team members and deliver significant results in that same sense.
Every plan must also consider the company’s leadership. They act as a link between top management and workers, so they must be well-informed and have the authority to make complex decisions.
Measure And Improve The Profitability Of Operations
Selling goods or services profitably is crucial to keeping the company healthy and competitive in the short term. With this, an expansion plan will be successful; it will be more accessible even to keep the company active.
The profitability analysis must consider the company’s solvency index, sales markup, profitability percentage, and operations profitability. To improve results, it is essential to: build a culture that cares about profit, optimize sales prices and reduce costs. As the first and second chances are complex, focus on lowering costs first.
Separate costs into strategic prices (capable of generating new business or optimizing performance) and non-strategic costs (helpful in maintaining the company, such as water and energy). Then reduce non-strategic costs.
Count On A Project Management Software
Every expansion is also a project; in addition to having a clear objective, it has a beginning, middle and end. For this reason, it is possible to have specific software to manage each of its stages.
A sound project management system has several functionalities and facilitates from the initialization stage (expansion feasibility analysis) to the execution and subsequent measurement of the results obtained.
The system also helps to define short-term goals, which act as a step-by-step guide to achieving the big goals. Reasonable goals should be measurable, objective, realistic and with a well-defined deadline.
Finally, the system helps the entire team communicate, keeping them connected throughout each stage of the expansion project. In this way, it is possible to eliminate the number of errors and optimize the chances of success.
Also Read: How To Keep IT Aligned With The Business?