Every business owner starts a business with growth in mind. You don’t want your company to stay as a startup. You want it to expand to new markets and industries if possible. However, with expansion comes failure, and as a business owner, it’s something that we all fear. Plans may backfire, which can affect your company.
When this happens, it will be lucky for you if it’s a lesson learned and have your business move on, but in the worst-case scenario, your business will go bankrupt. That said, it’s only natural for us to have little to no room for error. Speaking of errors, there are many things you should be careful of when expanding your business. These mistakes can cost you a little of your company or all of it, so it should be in your best interest to avoid them.
Not Listening to Customer Feedback
It’s well known for all business owners that one of the fatal mistakes a company can make is ignoring customer feedback. As a company, customer satisfaction is the priority since it dictates sales. Customer feedback is also crucial when expanding. How? You’ll fail to notice how your customers will react once you’ve expanded to a new market without listening to customer feedback.
Customer feedback lets you know what your customers feel about your products and services and even as a form of market research. For example, people are looking for options for no credit check loan, so a business that understands its customer needs and provides solutions will flourish.
Taking Too Many Employees
Your staff plays a vital role in the success of your enterprise. Without it, your business would stop operating, and without continued operations, no sales and no sales mean no profit. But you just can’t hire too many people. That’s especially important for small businesses.
Taking on too many employees is a fatal mistake, and it’s also applicable to a new branch. Although the workload for a new unit can be heavy for yourself and your key team, you need to think carefully first if your business can maintain all of your employees once the new branch takes shape. Also, all the costs of extra work they’ll do; you’ll have to pay for as their boss.
Instead of hiring full-time employees, why not take freelancers and part-timers to cover really busy periods. It gives you a lot of flexibility in the long run, and their service is much less expensive than hiring full-timers. Your business would handle much less financial pressure in the long run with less cost.
Not Having a Market Expansion Strategy
A market expansion strategy involves selling your products to a new market when the business’ growth peaks in its existing sales channel. But you need to make sure to secure a fulfilled existing market before you can have your plan go into motion. Now, why is this important?
It’s useless for your company to have multiple branches in the same market because your supply will exceed the demand unless you build them for the customers’ accessibility. To expand efficiently into new markets, you first need to assess the assets and capabilities of your business.
It could include launching a new product to a new market that you think will have an appeal to your customers. But you need to do market research first to get to know your customers so that your brand solves their problems. You also need to make sure that you have the financial stability for these initiatives.
As mentioned earlier, the expansion comes with risk. If your business’s finances will take a hit just to launch a new product or service and the customers don’t see an appeal to it, your company will be in danger, so you need to have a market expansion strategy put into place.
Not Having a Pilot Experiment
A pilot is a small, simple, and controlled experiment that lets you know if your product or services will have an impact on a new market. It works more like a test run to see if people like your products and services in a new market. It’s a key to a successful business expansion. A pilot experiment is part of market research. Your business expansion might halt without proper knowledge once the customers see what you’re offering and don’t react to it.
Business expansion is a risky thing to do, especially for a small business. Even big established businesses take a hit when their expansion does nothing for their company. If you want a successful business expansion, you might want to consider what we discussed above.
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