Business Development: 3 Business Expansion Pillars

By , September 8, 2012 1:13 pm
Thinking Carol

photo credit: kaje_yomama via photo pin cc

We don’t want to, but it’s often irresistible.

What is it? Looking around and seeing scores of possible new opportunities to boost our business.

We look at virgin (well at least to us) terrain through rose colored glasses and think wouldn’t it be great. We need to…

…tweak our product so it can help a new demographic
…get Company X to make us a business partner, then the sky would be the limit
…go national – no international

If even half is true, why do so few execute on perceived opportunities?

Breaking into a market is difficult.
Expanding can be an attractive and lucrative proposition. It is, however, also a pivotal point in any business’ life because it requires doubling down on the bet that it is the preferred solution. This increase in risk causes our subconscious, and correctly so, to trigger a mental circuit breaker. You’ll recognize the statements for they usually contain “but if” or its close cousin “but what if”.

But if:

  • We move by ourselves, it will take years.
  • We have a hiccup, will we have enough cash to safely sustain what’s already built?
  • I’ve never done this before, how will I know what’s right?

Let’s all thank our subconscious. With so much at risk it is important that we take the time to understand how we are going to avoid jeopardizing current success.

This isn’t a how-to list.
There are tons of books, articles, and blog posts that rundown the different expansion techniques and explain which ones are suited for particular types of businesses. What I want to armor you with are the strategic actions that will help carry you to victory, or keep you from entering into a losing situation.

A simple, yet powerful formula.

  • Do your homework. Make sure you first build the infrastructure and resources to adequately support the move. Many try to rely on outside service providers to do virtually all the heavy lifting. Although it is quick and easy to implement, it often leads to its own set of problems; escalating costs, delays, and poor service delivery. Don’t double down on your risk by doing this.
  • Timing is everything. Make sure you’re operating at or above industry performance levels for your size business. Proving that you can consistently operate at those levels for several consecutive quarters provides you with managerial confidence and more importantly, the financial heft to work through the challenges expansion will inevitably throw your way.
  • Seek out guideposts. First, you can read articles like this (yes, a shameless plug). More importantly, take a look around and find a role model. Someone who has encountered this very challenge and reach out to them. You’ll be surprised how open they are to talking about their great accomplishments and brilliant insights.

Patience is the companion of wisdom.
Saint Augustine

If you currently can’t meet the above, there’s no shame in waiting. Expansion requires understanding and managing a whole new set of challenges – in essence, a very different business. Being a great business development professional means that you know when to pullback and wait for the right signals.

 

Donald McMichacel teaches BE 261 – Starting a Small Business.
Follow him on Twitter at @DonaldMcMichael or Google+ at +Donald McMichael

2 Responses to “Business Development: 3 Business Expansion Pillars”

  1. Mark says:

    I would like to make 1 quick suggestion here Mr McMichael which I’ve experienced in starting my own business.

    That is, some times you need to go for it. My market research showed there was a decent demand for my services but I feel, at the end of the day, you’ll never get enough surety that what you will do will be successful.

    I actually think the most important thing people realize is that a business is not a 9-5 job – it’s 24 hours.

    hope that helps and that you agree.

    Thank you

  2. donald_mcmichael says:

    Hi Mark,

    Thanks for sharing your insights and experience.

    You’re right about never being 100% sure that what you propose or believe will be accepted by the market. What we should all do is attempt to balance the risk with the perceived reward. The mind set (strategy) required to quantify the elements of this equation is the focus of the post.

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