Signs a Business is Ready for Market Expansion

Business expansion is not a trivial thing that can be done even though the business is promising. This often causes doubts for leaders to develop their business. However, identifying the right time also requires some care.

Business expansion is the stage where the business reaches a growth point and already requires additional options to generate more profits. Forms of business expansion can be done by adding new branches, improving marketing, mergers or acquisitions of other businesses, global expansion, and expansion via the internet.

Each company can choose a different business expansion strategy according to the uniqueness of its industry. However, there is no guarantee that the strategy implemented by one business will produce the same results as if it were implemented by another company.

Characteristics of a Business that is Ready to Expand

A business expansion cannot be done without a comprehensive plan and strategy. Every business process will have a negative impact if it is carried out at the wrong time. Therefore, companies that want to develop their business must consider the following things.

1. Loyal customer base

Companies need to have a loyal customer base before expanding their products. It is important for companies that always buy and use their products. Loyal customers are a strong foundation for a business to continue to grow. This means that customers are satisfied with the product because demand for the product appears continuously.

2. Customers request expansion

When you have loyal customers, some customers find products easily and are available in many places. This may be needed by customers who travel or move to another place, but can't find the product. Customers will suggest the company to expand its product distribution network or open new stores.

3. The business has been profitable for more than 3 years

Even though the company has experienced an increase in revenue, this is not enough to make the company expand its business. Company profits can increase drastically, but this is temporary or seasonal. However, stable profits over the long term of up to three years can be a sign of business health.

4. The market is growing

Businesses whose markets are well developed can expand their products with more confidence. This is because market growth indicates that there are many potential consumers who want to buy the product. Without good market growth, business expansion will be difficult.

5. Stable business and positive cash flow

The company must have stable funds with positive cash flow. Selling lots of products every day can still help the business run, but it's impossible for the funds to be stable. Businesses that cannot manage funds well will face instability even if they have many customers. Before expanding, the company must have a stable condition.

Running a business is not just about selling lots of products, but there are other aspects that need to be considered so that the company becomes successful. The need for a comprehensive plan is very important for business expansion because it impacts the organization. Unstable businesses will face risks when they decide to expand their products.

6. Operations can run independently

When you decide to expand, you need a solid team that is capable of running the business independently. That way, you can focus more on business expansion. Also keep in mind that you must have enough money to fund your expansion plans to make a profit.

7. Get full support from employees

If you have a strong support system consisting of employees, contractors, vendors and other stakeholders who are passionate about building a business together, there is a possibility that your business will be successful. On the other hand, even with the various resources available, it will not be difficult for you to take new steps without the support and enthusiasm of the team.

8. Demonstrate clear social values

Shift attention to the social value the product can provide. Your business must be able to meet the urgent social needs of a cause. You have to help customers to achieve a goal. Achieving a social impact creates alignment with new customers or business verticals to determine how to stand out from potential competitors.

9. People no longer haggle over prices

A good product has the power to determine the price as the most promising investment for the business. Companies that rarely negotiate on price have a significant advantage in making product improvements and growth. When you are able to deliver profitable results, you are likely to enjoy cost and technology advantages over your competitors that can be scaled up.

10. Have excess resources

When you need to expand, several things in operational activities will feel redundant. For example, inventory runs out more quickly or there are many new tasks that must be completed, while not many employees have to complete them. This is a good sign and you should adapt to make changes such as hiring more people. The aim of this is to maintain product and service quality.

In general, it would be very good if a company could develop its business and get new customers. A business that is already running well with a number of customers has the potential to expand which can complement product development.

In order to carry out a smooth business strategy, the Strategic Business Analysis program provides space to analyze the company's situation. You can carry out strategic formulation and implementation to expand the market well.