As women in business, we always have the opportunity to learn something when it comes to leading and succeeding in the business world. And every owner wants to expand their business in the future. However, there's a risk of losing control and failing that comes with scaling. So this article will review some tips that you can use to expand your business while keeping it under control.
Fixing Your Cost Structure
Before anything else, you will need to assess your business’ cost structure. The expansion comes with additional costs like new machinery or a new location. Being blindsided by expansion costs could hurt your company. Finding a way to lower your operating costs frees up cash, allowing your business to grow and stabilize. You can cut costs by eliminating low-earning products or low-performing services, or by improving your inventory turnover through new marketing and sales tactics. However, you also must be careful not to cut costs in a way that hampers your employee satisfaction.
Recapturing Existing Customers
When we think of expanding, we mostly focus on getting new customers. However, old customers are also an opportunity to expand your business while retaining control. A study has found that customer retention helps in improving the value of a company. Customer retention is getting customers who have purchased from you before to do so again. This relies on them having a positive customer service experience the first time around. Build-a-Bear, founded by Maxine Clark, is a unique business that lets children make their own stuffed animals. Businesses like Clark’s rely heavily on families having a positive customer experience to retain their customer base and possibly bring in new customers. Implementing strategies that both retain old customers and acquire new ones is certainly the best way to expand a business.
Controlling Your Leadership Structure
The growth of your business has a major impact on your company’s organizational structure. As a business expands, the leadership structure also expands. More employees need to be hired, which means new managers. Moreover, growth may necessitate an executive team to oversee various aspects of the business. Your business’ legal structure helps in determining the flexibility of management. A corporation is suited to more complex and structured frameworks. However, a more bureaucratic structure means that owners have less direct control over management and oversight. The flexible management structure of an LLC may be more suited to small businesses looking to grow incrementally. This allows them to maintain control over management and oversights while expanding.
Diversifying Your Products and Services
Growing a business relies on diversifying your set of products or services. Diversification is about building on similarities in two ways. The first is focusing on products or services that are related to the ones you already sell and that address your current customer base. The second is to consider new market segments that have comparable needs and characteristics to your existing customers. Spanx, a women-owned company and a leader in shapewear, has diversified their products successfully. Spanx used to focus on producing undergarments that flatten bellies and muffin tops. Now, they make leggings, bras, shirts, and arm tights too. This strategy allowed them to branch out from their initial customer base and meet the needs of a new market.
Using Strategic Marketing and PR
Strategic marketing and PR is another strategy to expand your business within a specific market segment. The Body Shop, founded by Anita Roddick, revitalized its brand in the 2010’s through the development of a new corporate social responsibility strategy. These days, half of their products are vegan. This green marketing strategy helped position them as a sustainable and environmentally-friendly body and skincare line. They are now able to tap into more socially conscious customers because of this shift in marketing.