Have you successfully been doing business in the same place for a long time now? It may be time to develop a market expansion strategy.
More and more businesses are expanding regionally and globally and there’s never been a better time to do it. There are a lot of benefits of expanding a business and many resources available to do so, so you may want to consider doing so.
In this guide, we’ll tell you about the benefits of market expansion and how to know if it’s time to expand.
- Reach a New Customer Base
One of the top benefits of regional or global expansion is that it will allow you to reach a new customer base.
Whether you expand to a new market or simply expand the products and services that you offer, doing so can allow you to reach new people and get more customers for your business. Tapping into a new market allows you to build your revenue while still allowing you to hold onto your existing customer base as well.
Keep in mind that sometimes other markets offer even better growth potential than your current market. You may find customers in another city, region, or country that you won’t find where your original business location is.
- Economies of Scale
One of the perks of market expansion is economies of scale. These are cost reductions and discounts that vendors and suppliers may give you when you need to increase the amount that you purchase.
By being in more markets, you’ll end up buying in larger quantities and can get bigger discounts. This means that you’ll pay less for supplies overall. This can help you to become more profitable and to reinvest more money back into your company.
- Establish New Streams of Revenue
When you expand into new markets, you’ll also be building new revenue streams. Establishing multiple income streams and diversifying your assets is a great idea and can help you to get your business on a more solid footing.
Expanding into new markets will allow you to have multiple locations for your business and can also allow you to experiment with new service and product offerings. As a result, you’ll build multiple streams of revenue and can start getting earnings from a wider variety of business activities. This can help quite a bit when aiming to make your business more secure and profitable.
- Create a Better Brand
When you make the decision to expand, you’ll also be building the reputation of your business. By selling products and services in more than one area, you’ll build more brand awareness and can market your business more effectively.
When your business is in multiple markets, each location will benefit from the other’s success. People who visit your business in one market will already be familiar with you if they visit another market you’re in.
Additionally, many people view larger businesses with multiple locations as being more trustworthy and reliable.
- Access New Talent
Another benefit of expanding your company to a new market nationally or globally is that you can get access to a wider talent pool.
Some areas have better-trained professionals for certain types of work than others do. One city or region may have a well-trained manufacturing or engineering workforce, for example, while another one may not.
By expanding your company and setting up shop in various locations you can utilize the best workforce in each area and can make use of it when growing your company. Expanding to a new market allows you to get the best talent and can allow you to strategically manage different parts of your operations in various locations.
If you want to get access to a great workforce, international business expansion may be the answer.
Knowing When It’s Time for Market Expansion
While you may understand the benefits of market expansion, it’s hard to know when it’s time for your company to expand.
Here are some things that you should look out for when deciding whether you should expand your company or not.
Demand Is Higher Than Supply
If you’re finding that there is a lot of demand for your products and services and not enough supply, you should take note. It may mean that it’s time to expand your business, open a new location, or move into a new market.
Especially if you find that many people are visiting your business from far away to get access to your products or services, it may be time for you to expand.
Your Business Is Thriving
If you find yourself overwhelmed with business activity and you often have to turn down customers or clients, it may mean that it’s time to expand.
While you may not feel like you can take on an expansion on your own if you’re already overworked, it may be a good time to do it. Expanding your business while also hiring more staff to run a new location can help take a weight off of your shoulders and can distribute your customer base a bit more.
You Have Plenty of Extra Capital
If you have a high amount of capital sitting in your bank account, it may be worth doing something with it.
It’s good to have some extra cash lying around for emergencies. However, if you have a lot of extra capital, it might be better put to use by expanding your business, entering new markets, or creating new product offerings.
While you’ll still want to have a clear plan and make use of a marketing expansion grid, it may be worth expanding into a new market or developing a new product.
Business Excitement Has Faded
If your business is successful but you aren’t feeling as excited about it as you once did, it may be time to expand.
If you’re complacent and bored in your business, it can be a problem as you continue to run your business day after day. It may be time to become a bit more ambitious and consider entering a new market.
Is It Time for Market Expansion?
There are a lot of benefits to market expansion, but you’ll want to make sure that your business is ready for it. Be sure that your company is successfully operating in its current location before you decide to make the leap to a new market.
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