3 Tips for Smart Business Growth
These tips can help your business fly sky-high … without getting too close to the sun.
The ancient Greeks warned about the tragic outcome of flying too high, too fast ever since they spun the tale of Icarus. Yet businesses like Forever 21, which recently filed for bankruptcy after rapid global expansion proved to be the wrong move, often jump too quickly into growth mode without considering the complications, costs, or trends in the market.
That’s not to say expansion is a bad thing. Your business was probably launched with growth in mind. Done the right way, it can launch you toward a new level of profitability and success. The danger is in tackling expansion prematurely. Your business needs to be ready for growth, and you should make sure that customer satisfaction, quality, and operations can withstand the process.
Are You Ready for Expansion?
Businesses are complex beasts, and there are many factors to consider when determining whether an expansion makes sense. Do you have a loyal customer base asking for new products or more convenient access to your business? Has your business been profitable for at least a few years? Is your industry or market growing? Do you have a steady cash flow? Do you routinely have more business than you can comfortably handle? If you answered “yes” to all or most of these questions, the time might be right.
Once you decide it’s go time, you have to figure out what your growth will look like. Expanding your offerings, launching an e-commerce site, acquiring a new business, offering a loyalty program, and franchising are some of the typical growth avenues.
At the same time, be aware of the common pitfalls of expansion. Make sure your current offerings and customer service won’t suffer and that you’re hiring smartly, putting proper cybersecurity protections in place, and performing all the necessary due diligence before diving in.
3 Steps for Smart Growth
So you’ve determined that expansion makes sense, and you’ve done all the necessary research. Now what? Use the following steps to guide you through a successful growth phase:
1. Find your North Star.
Before launching into an expansion, you need to consider your core mission. Use it as a North Star to guide any decisions regarding expansion and remember that any new product or foray into a new market must feel like a natural extension of it. SoulCycle, for example, has leveraged the strength of its spinning class brand to expand into direct-to-consumer activewear. A move like this can help companies bridge to something new.
“With a proven core business, you’ll have momentum and presence, and there will be interest in your next move,” says Jason McCann, CEO of Varidesk, a full office furniture company. While McCann’s firm once considered its original sit-stand desktop converters its North Star, now Varidesk helps companies create active workspaces that promote health and wellness — a natural fit with its core purpose.
2. Respond to customer feedback.
Discovering the secret to a successful expansion might be as simple as talking to your existing customers. Find out their pain points, why they buy your product or service, and how they think you could improve. Maybe you’ll learn that your customers are traveling a great distance to buy your product or you’re routinely shipping to a particular market. Those are telling signs that expansion might be due.
Direct-to-consumer furniture brand Interior Define is one company that is using customer feedback to guide its expansion efforts. It recently created a C-suite role devoted to tapping into the wants and needs of its customers as it enters a growth phase. “Brands are finally listening to the customer and understanding what it will take to exceed their expectations,” says Jill John, the company’s chief customer officer. “Without the customer, you’re driving something that’s not relevant.”
3. Hire and train more employees.
If you have more business, you’ll need more people to handle day-to-day demands. Bring on a few extra staff members to handle the additional load and help you solve any new challenges that pop up. This should be done ahead of your planned expansion, as onboarding a new employee takes time.
Beauty brand Glossier recently launched an innovative program to help new hires at all levels of the company to connect with its brand value of customer dedication. During the onboarding process, new hires work a shift at one of Glossier’s retail stores. The hope is that they will understand the larger purpose behind their work and gain some real customer insights to help guide the company as it grows.
Growth can sink a business just as easily as it can boost revenue. The key is to carefully plot your expansion by exploring your options, listening to your customers’ feedback, and staying true to your core purpose.
Originally published on inc, https://www.inc.com/rhett-power/3-tips-for-smart-business-growth.html?icid=landermore
