This blog was last updated on November 25, 2020.
There’s no better time than the new year to start planning the next phase of your business expansion. An expansion is a long-term commitment, but having a four-step plan in place can give you a clear framework for the path ahead.
The very first step on your business expansion journey can be the most daunting one: developing your vision with a written plan to achieve your goals in the months ahead. Even though goal setting and planning takes time and effort, avoid the temptation to procrastinate. Instead, take some time to think about what prompts your desire to expand, how you can ensure success during the expansion process, and what your end goal needs to be.
Visualize where you want to be at year’s end, and think about how creating an expansion plan for the year ahead can help you to get there. Let’s not waste any time getting started!
1. Learn From Past Mistakes
You can’t plan for growth without knowing what your starting point looks like. Think about the last year of business and identify areas where you could have done better. Every expansion plan should address a problem area. For instance, are sales too low or stagnant? Introducing new online channels, opening a new location, hiring more staff, or investing in a marketing campaign might result in the growth you’re seeking. You need to accurately assess your business’ strengths and weaknesses, as well as what is going on in the marketplace, and build from there.
Some potential areas for improvement could include:
- Customer retention: It costs less to keep a customer than to acquire a new one. Consider what changes your business could make to help with customer retention. Would an additional location help to increase customer loyalty by making it more convenient for them to choose you over your competitor? Do you have a loyalty program set up to nurture your customers throughout the year?
- Sales revenue: What opportunities exist to increase your overall sales revenue? Adding locations can certainly increase your revenue, but it’s not the only way to increase sales. Consider training your employees to be more sales-oriented, remodeling for a customer-friendly space, and investing in paid advertising to ramp up your sales.
- Gross margin: The higher your margins, the more profit you’re making for the same amount in sales. When you sell higher volume across multiple locations, your efficiency increases, and so does your margin. Consider ways to max out on efficiencies for your business to help your profit go further.
- Cost of operation: As you’re considering the items listed here, it’s important to understand the cost of operation and where you can get the most bang for your buck. For instance, if you’re opening a new location, you have the opportunity to learn from other stores and find efficiencies earlier on in the process. If you’re hiring new staff, does it make more sense for you to hire directly or to hire someone to help with that process, freeing your time for other business needs?
These are some of the most common areas where businesses make mistakes and have the opportunity to improve their overall operations, but it’s not an exhaustive list by any means. Look at your operations with a critical eye; even if things are currently “good”, there’s always room for improvement. If you find analyzing your business difficult, consider some of the most common business metrics to track and choose a few that make the most sense for your particular business.
2. Find Solutions to Address Your Concerns
It’s normal to be apprehensive about a massive undertaking, such as building a business expansion plan. Instead of dismissing the process because it seems hard, ask yourself honestly what you’re afraid of, and consider the solutions to help address those concerns.
For instance, it’s expected that business growth is going to cost money, so you may be wondering how you’re going to fund the expansion. Applying for business funding, reevaluating your budget, and making economic choices going forward can all be valid solutions, and chances are that you’ll use all three of them at some point before this process is over.
If your fear is that you’ll fall off task and fail to meet deadlines, then stop and consider why you might fail. Is it because of a lack of time? Consider delegating responsibilities to other team members when the time comes. Are you worried that your goals will end up being unrealistic? Break them down into sub-tasks so you can tackle them a little bit at a time.
No matter what you fear when it comes to the expansion plan, there’s a solution out there. It just takes some soul-searching to identify your concerns and figure out how to address them.
3. Plan the Next Steps for Growth
You’ve identified areas where you could improve your business. You know that simply deciding that you need to add a location or figure out a new advertising roadmap isn’t enough. Now it’s time to conceive how you’re going to get it done in the New Year.
Next, take the time to map out your action plan, laying out what needs to be done. If your solution to low sales velocity is opening a new location downtown where the potential for sales traffic is high, then your action plan might include items such as scouting out new locations or doing market research to find the right neighborhood.
This might seem like a lot of front-loaded work, but having a plan from day one helps ensure that you stay on task and move toward your projected end goal. You can work on accomplishing each task as you get to that stage in the expansion process. But having the work laid out ahead of time helps you keep a crystal-clear vision of what needs to happen in the months ahead.
And remember, all of your hard work and planning will be worth the effort!
4. Review Your Financial Needs and Research Your Funding Options
Congratulations! You’ve gotten through the first step to business expansion: identifying problems and choosing an expansion plan that can solve those problems. At this stage, you will want to consider how you’re going to finance the coming changes and improvements.
There are a number of different funding options out there for your business, and it’s important to consider them all to identify which is best for you.
If you are interested in learning more about how a working capital loan may help with your plan to grow your business, call Mulligan Funding at 855-326-3564 to discuss your financing options with a dedicated loan advisor today.
The information shared is intended to be used for informational purposes only and you should independently research and verify.
Note: Prior to January 23, 2020, Mulligan Funding operated solely as a direct lender, originating all of its own loans and Merchant Cash Advance contracts. From that date onwards, the majority of funding offered by Mulligan Funding will be by Loans originated by FinWise Bank, a Utah-chartered Bank, pursuant to a Loan Program conducted jointly by Mulligan Funding and FinWise Bank.