Have you ever seen one of those “World’s Strongest Men” contests where these leviathans are asked to perform incredible feats of strength? One of the most amazing displays of strength I’ve seen was the airplane pull.
An average strongman competitor weighs 350 pounds. But that’s only a fraction of the weight of a 610,000- pound airplane each strongman has to pull across 50 yards! After a massive effort, the plane starts to move, and as it gains momentum, the strongman can tow it across the 50-yard line.
Why am I telling you this?
Managing a business requires strongman, herculean effort.
The hardest part is always to get it started. Once it is launched, you apply more effort to gain traction without veering off course. Just like a strongman, if you go off-course, it will take more effort to bring it back in. Eventually, you will start to realize a regular stream of income. Some months will be more profitable than others, and this should be expected.
Business moves in cycles because consumer spending patterns may follow a trend; seasonal or otherwise. Thus, if you have been following my advice, you should be reviewing the financial reports prepared by your accountant on a consistent basis.
In any business, the rule remains unchanged: strategy follows numbers.
One of the main reasons small businesses close down is the owner’s failure to manage his money. The flow of your capital determines the efficiency of your business and the rate at which it is growing. Without a constant review of your numbers, you will have no clear idea of how your business is performing or if your business is ready to undergo expansion.
The business owner may want to expand business for the following reasons:
1. Develop his existing customer base
If your products have managed to acquire a particular market base, you can work toward market retention by diversifying your product line. You can present new varieties of the same product or entirely new merchandise which is related to your business.
2. Open up new market opportunities
The business owner may also want to increase the volume of sales by exploring new markets or regions for his products and services.
3. Improve brand recognition
Business expansion, when done strategically and with purpose, will improve brand recognition as more consumers from different markets come across your products.
4. Create “economies of scale”
By expanding your volume at various markets, you may potentially earn bigger discounts from your wholesaler. Assuming your current facilities can accommodate the increased volume, you will not incur added costs per unit of the item sold thereby improving the profitability of your business.
The underlying motivator for business expansion regardless of reason remains the same: to make more money!
Business expansion is a strategy that can be applied if your venture is underperforming or exceeding expectations. The key component in any business expansion plan lies in its ability to accommodate the programs
needed to support it.
The question for you is: Are you ready to scale your business?