Top 5 Ways to Expand Your Business
Tuesday, November 28, 2006
As a small business owner in the construction industry, you might be considering ways to expand your company. Expansion is not for every company. However, if your business has maintained steady profitability, your service area has potential for growth, and you have systems in place to handle the growth then it might be time to expand:1. Add a New Service - If you're an electrician, you might consider adding low voltage installations to your list of services. If you're a residential remodeling company you could include home additions as an avenue for growth. The great thing about adding a new service is that you have an excuse to promote it. You'll be able to contact every past lead and every old client to let them know you now offer new services. It could lead to more business and more referrals.
2. Expand Your Market - If you currently work in one city or one county, you could expand and advertise in new locations. Many conduct business near another state -- it makes sense to get licensed in that other state and offer services there. It could mean hiring another crew or adding additional vehicles to cover the new ground so having available financing could be an issue. Increase slowly to test the waters and pull back if it's not feasible. You may end up doing well in a new market because those customers may be sick of or tired of their choices of service professionals in their area.
3. Open a New Location - Similar to expanding to a new market, you might consider opening an office or hiring a crew in a new city or state. You'll need to focus your marketing efforts in that area as well as maintaining your current marketing projects for your area. It will also mean frequent travel to the new location to ensure quality of work. Pay attention to advice from any crew you hire because they'll know more about suppliers, competitors, and potential clients.
4. Partner Up - Merging with another service competitor or a company in a different line of work could provide an increase in market share. Another company may have a lot of great workers, tools and equipment, and a long list of referrals but is being poorly run. By acquiring a company in bankruptcy or merging with a strong competitor, you can quickly expand and maybe even double revenues in your area. There will always be problems of merging technology, management styles, and visions for the business. Make sure you have an exit strategy if the alliance does not work out. Have that strategy in writing in the form of contracts.
5. Work New Categories - If your company only focuses on commercial work, residential work, or contracts with the government, you might consider expanding into one of the other categories. It's certainly not an easy task to make this sort of switch. It is not a fast transition to make because it requires extensive retraining, retooling, and better infrastructure for the business as a whole.
Whenever you're planning to change your company by expanding it:
- You need to make sure that you won't be affecting your current business or quality of your work
- You have financing in place to handle the change
- You have employees with the right skills to handle additional work and paperwork
- You are ready to delegate work to others and that they're ready to handle higher demands
- You have the support system to handle any length of transition to your new business model
