Businesses are often challenged by growth plateaus and to reach new customers in their current market. While these struggles can be frustrating, this is also an opportunity for business expansion.
In short, business expansion is when a company is ready to grow into new markets or gain a larger client base. It may mean starting a franchise, adding employees, or expanding into foreign markets.
Having a well-developed expansion strategy is vital before growing your business. A brand can only broaden if it has a solid customer base, quality existing products, and a solid marketing plan. That’s where a business expansion strategy comes into play.
We’ve gathered and analyzed nine top business expansion strategies for entrepreneurs and other business leaders to use when they’re ready to gain new customers.
The first three strategies (conduct market research, invest in research and development, and hire talented individuals) are prerequisites for the other six. Plan to focus on those priorities before moving forward.
Top business expansion strategies
- Conduct market research
- Invest in research and development
- Hire talented individuals
- Increase your product line
- Expand market reach
- Introduce new technologies
- Focus on diversification
- Foster international growth
- Find new markets
1. Conduct market research
Before deciding on a growth strategy, learn about external factors that could affect business objectives. Analyzing customer and competitive trends, exploring potential areas for expansion, and understanding the local market conditions are important precursors to expanding into new markets.
A SWOT analysis is an effective strategy that even the largest businesses use during times of expansion. This analysis asks business owners to consider their company’s strengths, weaknesses, opportunities, and threats. Whether a startup, a new business, or another type of company, a SWOT analysis can help you understand what your expansion plan should include to be successful.
A SWOT analysis can also help when you’re:
- Exploring new initiatives
- Updating internal policies
- Altering an existing expansion plan
- Conducting quarterly or annual reviews
2. Invest in research and development
Researching new product ideas and testing prototypes in different markets is important. This helps businesses determine which concept has the highest potential for success before making financial investments in development projects.
This is where innovation comes into play. Think about once-successful companies like Kodak, Blockbuster, and Toys R Us. Each was once an industry leader but failed to invest in innovation when market demands changed.
Avoid their pitfalls by rewarding innovation and thinking outside the box regarding new products that could help your brand thrive in your target market.
Once you’ve invested in product research, flesh it out and test prototypes in new and existing markets. Are you a coffee shop owner hoping to franchise your brand nationwide? A novelty coffee drink made with local ingredients may not work in a new market where those same ingredients are scarce or unusual.
3. Hire talented individuals
Hiring individuals with highly talented skill sets and professional experiences plays a key role in expanding your business.
Perhaps you want to expand your social media reach to a particular market or increase partnerships to gain new customers. Hiring niche workers can help you develop the marketing strategies you intend to use in your expansion strategy.
Consider Key Performance Indicators (KPIs) for onboarding new talent. A small set of KPIs can help you understand what you’re looking for in a worker and what that worker needs to accomplish to succeed. For instance, you could measure their contributions, skills, and overall value they add to the business. This helps you remain objective when deciding who to hire.
When you’re ready to add new people to your growth strategy, find talent on Upwork for any area of your business.
4. Increase your product line
Adding new and exciting products or services can help businesses grow quickly. Expand your offerings with items that are complementary or closely related to your current product lineup. These may appeal to existing and new customers, giving you a unique growth opportunity.
Let’s return to our coffee shop example. Existing products likely include lattes, mochas, and espressos, but you may notice a trend in your existing market for matcha-flavored drinks. Adding these beverages to the menu might entice your current customer base and garner the attention of new customers, giving you two expansion opportunities.
5. Expand market reach
Business owners have options when improving customer reach and engagement—from social media outreach to targeted ads.
Still, you’ll need to consider your budget and resources when deciding how to expand your market reach. You can choose to focus on one or more of the following to get the desired outcome:
- Broader distribution within a region. Consider broadening your distribution within a larger region. Go from one shop to two, or bring your small business online. For instance, if you’re currently selling baked goods at farmers markets and festivals, try approaching local grocers or larger chains to see if they’d be open to a partnership.
- Marketing campaigns targeted at new demographics. When your ads start feeling dated or out of touch, it might be time to hire a graphic designer or advertising specialist to update or create new campaigns. Consider what your target demographics are into regarding current trends and issues and use that knowledge to speak to their interests.
- Pursuing export opportunities. Maybe it’s time to broaden your horizons and begin exporting a good or product. Maybe you’re one of only a few businesses offering something in demand. Use the SWOT analysis to decide if export expansion is right for you and if you have the necessary cash flow.
- Developing a digital presence. In today’s market, a digital presence is almost required for a business to sell its products and services. Ensure you have multiple channels for new and existing customers to reach you and entice social media users with creative and captivating imagery and interesting text. And if you’re hoping to reach a younger audience, it might be beneficial to use some of your cash flow to hire someone specializing in newer platforms like TikTok and Snapchat.
6. Introduce new technologies
Adopting new technologies can help businesses increase efficiency and revenue while cutting costs and improving their Return on Investment (ROI). Businesses can introduce new technologies for business expansion in a few ways, including:
- Cloud technology can allow your team to work remotely. This saves on commute time and allows them to work on projects from anywhere.
- Big data collection can give businesses information to help them make informed decisions during business expansion.
- Artificial Intelligence (AI) can suggest new products to online shoppers and replace live operators during customer support.
- A 3D printer can create prototypes during the research and development phase of a business expansion.
7. Focus on diversification
Diversifying a business’s product or service offerings is beneficial and can contribute to growth and stability. The coffee shop example may expand to include a bagel cafe, introducing several opportunities for growth (sandwiches, takeout orders, business lunches, and more). This is a small-scale example but can translate into a global diversification campaign.
Similar to increasing your product line (adding complementary or new products or services to a business’s offerings), including market research, product development, and risk assessment to your diversification checklist is vital when expanding your offerings. For instance, a risk assessment can help you measure variable outcomes and create a realistic plan to overcome potential downfalls.
8. Foster international growth
Larger companies wanting rapid global expansion typically develop an international strategy. This can include details related to integrations of foreign currencies, language translation options, and obtaining the rights to operate across multiple international markets.
It might also be a good time to consider whether hiring international workers is right for your business expansion. Outsourcing some work could be a great way to tap into foreign markets, taking advantage of the benefits of hiring a diverse team and ensuring your product translates across new locations.
Before implementing an international expansion, do your due diligence when understanding cultural differences and varied backgrounds. Train staff to respect workers in different countries and use technology to allow plenty of face-to-face connections. These thoughtful approaches to international expansion can foster a positive transition moving forward.
9. Find new markets
You’ll want to identify and target new markets for your business to succeed. Diversifying your customer base and reaching new markets can increase revenue and growth opportunities, and broaden your customer base.
Unlike diversifying your products and expanding your market reach, this business growth strategy involves researching new markets with existing products—a simple way to increase sales.
For a coffee shop startup, maybe this means traveling to other cities for pop-up events or food truck rallies to see if potential customers are interested in your products. For larger corporations, this could mean researching expansion across the Midwest or the Northeast.
Either way, research new locations and, when the time comes, hire the right talent.
Business expansion FAQs
Still unsure if you’re ready to take your business to new heights? Below, we cover some frequently asked questions related to business expansion strategies.
What should you consider before planning to expand your business?
Before embarking on a business expansion plan, consider the timing. The last thing you want is to lose what you’ve established due to poor planning. Some things to consider include:
- Existing funds. Do you have enough working capital to start a new market segmentation or international expansion? Have you considered potential salary and maintenance expenses? An emergency fund can help you through the first few weeks of a business expansion strategy.
- Location. Where is your target market, and is the new location realistic? Consider whether this new location will have potential customers for your business operations.
- Competition. Does your expansion plan include researching competitors who may detract from your expansion? Is there another global business that saturates your target market? You’ll likely need more capital to market against the competition.
- Current market conditions. Above all, research the current market and how it relates to your new products and business plan. An overview of related supply and demand can set you up for success.
What are the benefits of business expansion?
Several benefits can come from a successful business expansion. These benefits can help you succeed in a new market, begin a franchising endeavor, or even tap into foreign markets.
Further, business expansion allows you to:
What are the challenges of business expansion?
Challenges can (and likely will) arise when expanding a business; however, understanding the challenges can help you prepare for if and when they happen. These include:
- A need for extensive working capital
- Worker burnout or fatigue related to too much expansion at once
- Greater inventory management needs
- New compliance requirements (for instance, if you expand to international markets)
- Competitive businesses that don’t want to give up their share of the market
- Lack of qualified workers to keep up with new demand
You’ll want to review these potential risks with your expansion team to devise actionable plans for avoiding pitfalls and using challenges to your advantage (for instance, maybe it’s time to add some fresh faces to your team). In any case, business expansion can be extremely rewarding and lucrative when successfully implemented.
Find talented professionals on Upwork to help expand your business
Are you ready to expand your business into new markets or offer new products? Perhaps you’re gearing up for another type of expansion or are interested in mergers.
Whatever the case, find professionals on Upwork to help with different needs in the process of business expansion. With Project Catalog™ you can browse lists of projects already planned by independent professionals, including e-commerce development, writing and translation, development and IT, and much more.
Project Catalog allows you to spend more of your time planning your next move. Your market expansion strategy has a lot of moving parts and requires the right team to implement it correctly, and Upwork can help.
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