If business is going well, you may be thinking about expanding. Before launching into any new markets, there are some key things you must consider. First you'll want to make sure that the current success of your business is not a fad. Do some forecasting to make sure that the market will keep rising in your new area. You also want to take a very close look at the area you're expanding into. Is there a need for your product or service that hasn't been provided in the past? Make sure another competitor hasn't already gotten the jump on you, established themselves and cornered the market.
Once you've established that the market's there, make sure that you're ready for the shift. You'll definitely need to change and expand your original business plan to reflect this move. You need to start running your small business as if it were a big business for awhile before you'll be able to tell if expansion will work for you.
You will also need to consider the logistics of expanding. Do you have the capital you need to expand? Do you have enough trained staff to smoothly transition into a new market? Have you done your research and examined all of the legal considerations involved in expanding?
You also need to consider the added stress on yourself. Is it worth it? Many entrepreneurs have expanded their enterprises only to have their business take over their lives. Unchecked expansion may be great for the bottom line, but what are the other costs? When you first started your business, you probably hoped that one day you'd have more time to spend with your friends and family. By pushing to expand relentlessly, you may find your personal life falling apart around you.
Deciding whether or not to expand your business into new markets can be difficult and complicated, make sure you have all the facts before moving ahead.
If you've finally managed to get ahead in your business, you've probably attracted your competitors' attention. They'll be watching to determine what you do right, and learning from any mistakes you make. By setting a new standard, you've challenged them to do better, so now isn't the time to be complacent.
Using information to maintain a competitive advantage requires effective interpretation. Analyze the information to determine the strengths and weakness of your competitors, where they see opportunities, and what they see as a threat. From this basic analysis, you can start predicting their next actions.
Just as your competitors will keep an eye on you, you should also pay attention to them. There are three basic steps to monitoring your competition: collecting information, analyzing information and predicting the actions they'll take.
If you own a restaurant, and your competitor is building a patio, it's easy to deduce that they're planning to increase their summer business. If you're the president of an investment brokerage and your competitors hire a dozen graduates from a local fine arts college, you may need to hire a professional analyst to figure out what they are up to. In any case, once you determine what your competition is planning, you need to decide how their actions will affect you. Do you want to compete directly, or let them test the waters first? If you try to 'build your own patio', you may find out the hard way that their plan was ill conceived. At the same time, if you don't compete, you could end up losing business. Whatever you do, your actions need to conform with your own long-term plans. Don't be unnecessarily reactive. Take the time to consider any new course, or you might find that suddenly you're the one trying to catch up.
Technology is an important part of any business. Whether you need a desktop computer for spreadsheets and an inventory database, or you need servers for a local intranet and broadband internet access for hundreds of employees, the fact is that technology is an important tool in modern business. You might be able to operate your business without a single computer, but if your competition is 'wired' you might find yourself left behind.
Determining your specific technology needs is simply a matter of informing yourself. Take stock of the tasks that need to be performed in order to operate your business effectively and determine which of those tasks can be made easier and more efficient through technology. There are many different ways you can determine what you need. Ask questions, go to the library, search the internet, or contact a technology consulting firm. By becoming an educated consumer, you will save time and money when it comes to purchasing, installing and operating new technology.
More and more businesses are looking to the internet as a way to reach a broader customer base and increase sales and profits. Establishing yourself on the web is reasonably inexpensive and straightforward. Having an e-commerce site will allow your business to receive orders from customers over the internet via secure credit card transactions. Combine this with the ability to ship your product, and your business could potentially serve customers around the globe.
Modern computers and servers can be expensive, and you need to take the time to determine exactly what you need before you spend the money. Hopefully your original business plan accounted for the capital expenses of any technology purchases you are planning. If not you will need to look at the financing options available to you. In most cases, the best financing option for the purchase of assets is a term loan. Once you have a firm idea of what you will need to purchase and how much it's going to cost, contact us at Kawartha Credit Union and we can discuss the financing options available to you.