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1. Increasing the production range with more verity is more safe.
2. By extending the territory you might spread yourself so thin too fast.
Increasing the production range may be safe as Alex said, but it may affect your current success. Make sure you don't overflow your current territory.
At the other hand, expanding the business to new territories is risky, as your success in one territory doesn't guarantee success in another territory. You have to execute an extensive market research to understand your new market and therefore develop a suitable strategy.
If I have enough resources (manpower, skills, production capacity, financial resources...), I will do both in parallel.
If you believe in HORIZONTAL marketing approach...... opt for territorial expansion & coverage
if you believe in VERTICAL marketing approach...... go for product's line extensions, variety & range.
BUT if you are passionate about your business....... i would say...... try every possible option to increase your business and show your talent to the industry.
There are numerous possibilities,10 of which are outlined here. Choosing the proper one (or ones) for your business will depend on the type of business you own, your available resources, and how much money, time and sweat equity you're willing to invest.
1. Open another location. This might not be your best choice for business expansion, but it's listed first here because that's what often comes to mind first for so many entrepreneurs considering expansion. "Physical expansion isn't always the best growth answer without careful research, planning and number-planning," says small-business speaker, writer and consultant Frances McGuckin , who offers the following tips for anyone considering another location:
2. Offer your business as a franchise or business opportunity. Bette Fetter, founder and owner of Young Rembrandts , an Elgin, Illinois-based drawing program for children, waited10 years to begin franchising her concept in2001-but for Fetter and her husband, Bill, the timing was perfect. Raising four young children and keeping the business local was enough for the couple until their children grew older and they decided it was time to expand nationally.
"We chose franchising as the vehicle for expansion because we wanted an operating system that would allow ownership on the part of the staff operating Young Rembrandts locations in markets outside our home territory," says Bette. "When people have a vested interest in their work, they enjoy it more, bring more to the table and are more successful overall. Franchising is a perfect system to accomplish those goals."
Streamlining their internal systems and marketing in nearby states helped the couple bring in their first few franchisees. With seven units and some time under their belt, they then signed on with two national franchise broker firms. Now with30 franchisees nationwide, they're staying true to their vision of steady growth. "Before we began franchising, we were teaching2,500 children in the Chicago market," says Bette. "Today we teach more than9,000 children nationwide, and that number will continue to grow dramatically as we grow our franchise system."
Bette advises networking within the franchise community-become a member of the International Franchise Association and find a good franchise attorney as well as a mentor who's been through the franchise process. "You need to be open to growing and expanding your vision," Bette says, "but at the same time, be a strong leader who knows how to keep the key vision in focus at all times."
3. License your product. This can be an effective, low-cost growth medium, particularly if you have a service product or branded product, notes Larry Bennett, director of the Larry Friedman International Center for Entrepreneurship at Johnson & Wales University in Providence, Rhode Island. "You can receive upfront monies and royalties from the continued sales or use of your software, name brand, etc.-if it's successful," he says. Licensing also minimizes your risk and is low cost in comparison to the price of starting your own company to produce and sell your brand or product.
To find a licensing partner, start by researching companies that provide products or services similar to yours. "[But] before you set up a meeting or contact any company, find a competent attorney who specializes in intellectual property rights," advises Bennett. "This is the best way to minimize the risk of losing control of your service or product."
4. Form an alliance. Aligning yourself with a similar type of business can be a powerful way to expand quickly. Last spring, Jim Labadie purchased a CD seminar set from a fellow fitness professional, Ryan Lee, on how to make and sell fitness information products. It was a move that proved lucrative for Labadie, who at the time was running an upscale personal training firm he'd founded in2001. "What I learned on [Lee's] CDs allowed me to develop my products and form alliances within the industry," says Labadie, who now teaches business skills to fitness professionals via a series of products he created and sells on his Web site, HowToGetMoreClients.com .
Seeing that Labadie had created some well-received products of his own, Lee agreed to promote Labadie's product to his long contact list of personal trainers. "That resulted in a decent amount of sales," says Labadie-in fact, he's increased sales500 percent since he created and started selling the products in2001. "Plus, there have been other similar alliances I've formed with other trainers and Web sites that sell my products for a commission."
If the thought of shelling out commissions or any of your own money for the sake of an alliance makes you uncomfortable, Labadie advises looking at the big picture: "If you want to keep all the money to yourself, you're really shooting yourself in the foot," says the Tampa, Florida, entrepreneur. "You need to align with other businesses that already have lists of prospective customers. It's the fastest way to success."
5. Diversify. Small-business consultant McGuckin offers several ideas for diversifying your product or service line:
"Diversifying is an excellent growth strategy, as it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins," says McGuckin, who diversified from an accounting, tax and consulting business to speaking, writing and publishing.
Diversifying was always in the works for Darien, Connecticut, entrepreneurs Rebecca Cutler and Jennifer Krane, creators of the "raising a racquet" line of maternity tenniswear , launched in2002. "We had always planned to expand into other 'thematic' kits, consistent with our philosophies of versatility, style, health and fun," says Cutler. "Once we'd begun to establish a loyal wholesale customer base and achieve some retail brand recognition, we then broadened our product base with two line extensions, 'raising a racquet golf' and 'raising a racquet yoga.'"
Rolling out the new lines last year allowed the partners' current retail outlets to carry more of their inventory. "It also broadened our target audience and increased our presence in the marketplace, giving us the credibility to approach much larger retailers," notes Cutler, who expects to double their2003 sales this year and further diversify the company's product lines. "As proof, we've recently been selected by Bloomingdale's, A Pea in the Pod and Mimi Maternity."
6. Target other markets. Your current market is serving you well. Are there others? You bet. "My other markets are what make money for me," says McGuckin. Electronic and foreign rights, entrepreneurship programs, speaking events and software offerings produce multiple revenue streams for McGuckin, from multiple markets.
"If your consumer market ranges from teenagers to college students, think about where these people spend most of their time," says McGuckin. "Could you introduce your business to schools, clubs or colleges? You could offer discounts to special-interest clubs or donate part of [your profits] to schools and associations."
Baby boomers, elderly folks, teens, tweens...let your imagination take you where you need to be. Then take your product to the markets that need it.
7. Win a government contract. "The best way for a small business to grow is to have the federal government as a customer," wrote Rep. Nydia M. Velazquez, ranking Democratic member of the House Small Business Committee, in August2003. (Click here to read that article.) "The U.S. government is the largest buyer of goods and services in the world, with total procurement dollars reaching approximately $235 billion in2002 alone."
Working with your local SBA and SBDC offices as well as the Service Corps of Retired Executives and your local, regional or state Economic Development Agency will help you determine the types of contracts available to you. The U.S. Chamber of Commerce and the SBA also have a Business Matchmaking Program designed to match entrepreneurs with buyers. "A fair amount of patience is required in working to secure most government contracts," says Johnson & Wales University's Bennett. "Requests for proposals usually require a significant amount of groundwork and research. If you're not prepared to take the time to fully comply with RFP terms and conditions, you'll only be wasting your time."
This might sound like a lot of work, but it could be worth it: "The good part about winning government contracts," says Bennett, "is that once you've jumped through the hoops and win a bid, you're generally not subject to the level of external competition of the outside marketplaces."
8. Merge with or acquire another business. In1996, when Mark Fasciano founded FatWire , a Mineola, New York, content management software company, he certainly couldn't have predicted what would happen a few years later. Just as FatWire was gaining market momentum, the tech downturn hit hard. "We were unable to generate the growth needed to maximize the strategic partnerships we'd established with key industry players," Fasciano says. "During this tech 'winter,' we concentrated on survival and servicing our clients, while searching for an opportunity to jump-start the company's growth. That growth opportunity came last year at the expense of one of our competitors."
Scooping up the bankrupt company, divine Inc., from the auction block was the easy part; then came the integration of the two companies. "The process was intense and exhausting," says Fasciano, who notes four keys to their success:
FatWire's acquisition of divine in2003 grew its customer base from50 to400, and the company grew150 percent, from $6 million to $15 million. Fasciano expects no less than $25 million in sales this year.
9. Expand globally. Not only did FatWire grow in terms of customers and sales, it also experienced global growth simply as a result of integrating the best of the divine and FatWire technologies. "FatWire finally has international reach-we've established new offices in the United Kingdom, France, Italy, Spain, Holland, Germany, China, Japan and Singapore," says Fasciano. This increased market share is what will allow FatWire to realize sustained growth.
But you don't need to acquire another business to expand globally. You just need to prime your offering for an international market the way FatWire was primed following the integration of its technologies with divine's.
You'll also need a foreign distributor who'll carry an inventory of your product and resell it in their domestic markets. You can locate foreign distributors by scouring your city or state for a foreign company with a U.S. representative. Trade groups, foreign chambers of commerce in the United States, and branches of American chambers of commerce in foreign countries are also good places to find distributors you can work with.
10. Expand to the Internet. "Bill Gates said that by the end of2002, there will be only two kinds of businesses: those with an Internet presence, and those with no business at all," notes Sally Falkow a Pasadena, California, Web content strategist. "Perhaps this is overstating the case, but an effective Web site is becoming an integral part of business today."
Landing your Web site in search engine results is key-more than80 percent of traffic comes via search engines, according to Falkow. "As there are now more than4 billion Web pages and traffic on the Internet doubles every100 days, making your Web site visible is vital," she says. "You need every weapon you can get."
Design and programming are also important, but it's your content that will draw a visitor into your site and get them to stay. Says Falkow, "Putting together a content strategy based on user behavior, measuring and tracking visitor click streams, and writing the content based on researched keywords will get you excellent search results and meet the needs of your visitors."
