Growing by Design
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“Growing by Design”
Growth opportunities come in a variety of forms. A great deal of valuable time and energy can be wasted if you do not pause long enough to evaluate the growth options available and determine which one is right for your company.
Introduce new products to existing customers — A good idea if your business has a long marketing or selling cycle and a good reputation. Existing or local customers will consider purchasing new goods more readily than consumers who are unfamiliar with your company.
Increase control over the channels of distribution — Spur growth by entering into a joint venture with a distributor, retailer or exporter.
Acquire a competitor — Be aware that this can be a complex and arduous process. You may not get what you thought you were buying if key people at that company resign because of the acquisition.
Franchise/license — If your business can easily be replicated, taught and controlled, it may be a good candidate for these options.
Expand geographically — It is usually a good idea to find other regions that share similar demographic features with your current market. The existence of business-service centers has helped service-oriented businesses expand geographically in recent years. Your company can also use flexible office space complexes — in which conference rooms, fax machines and photocopiers are leased on a per-unit basis — to test its capacity to attract and handle business in a new location. Be forewarned that you will have to learn new laws, familiarize yourself with regional differences, absorb more costs and spend a lot of time networking to make this option work.
Diversify/specialize — You will usually find that success breeds success after your market knows you. However, there are problems associated with attempting to be a jack-of-all-trades: You could end up being known as someone who doesn’t excel at any one particular product or service. Therefore, it is better to consider combining diversification with specialization that will apply your area of expertise to a similar range of products or markets. (Note: You will have to establish a reputation before you attempt this strategy).
Consolidate — Most businesses can’t sustain continuous, uncontrolled growth. At some point, you must slow down and focus on your core efficiencies. During these periods of assessment, you can realize growth from improved profits, reduced waste, controlled inventories and decreased turnover.
About the Writer: Aldonna Ambler is a certified management consultant and business strategist. She can be reached at 1-888-ALDONNA or aldonna@ambler.com. This article originally appeared in the Volume 2 (Spring) 1997 issue of Entrepreneurial Edge.
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