Check your pan, before fishing!
Niroshan Fernando
Business Administrator | Retail Specialist | Leadership in Sales | Marketer | Author
Business expansion - a dream?
?Once you have a stable revenue generating brick-and-mortar with you, your next step or the goal will be to expand your business. That is the dream of every businessman in the world. Let’s take a closer look in to this objective on below lines
?What is business expansion?
Why it is so difficult
?How can we do it
When can we do it
?What is business expansion?
In a retail environment, business expansion is increasing the number of stores where your customers can buy products from different multiple locations / channels. This could be in the same city or in any other. Basically, this means opening new stores in other geographical areas including other countries. This is a sign of a stable business operation; if any business is stable in one location with optimal conditions, then they will be considering an expansion. When retail business is expanding it is a very clear and strong message to the public that this is a strong commercial entity which is growing and worth dealing with.?
?Why is it so difficult?
We know the answer! But very difficult to practice! Whatever the reason and weather the implication is hard or not, we have to start in some point to proceed towards this goal, or otherwise we will be outdated in this changing world.
The main reason for most of us to not get involved in this is our mentality. We find one or the other reasons to not to make risky moves. All human beings would like to settle in their comfort zones. But we all know that ‘nothing is growing in comfort zones. The other main reason for not expanding could be the fear for risk. We all tend to take minimum risks in our life. But this is also a wrong motive, because I hope you have heard the universal truth of;
?“High risk, High return - Low risk, Low return”
Our fear for risk and addiction to be in the comfort zones are the only reasons which stop us expanding. The expansion requirement can rise only when we have reached the other levels of the existing operation, such as smooth operation with profits & capacity to invest. When we reached there, we will have two options either expand or stay where we are.?
?How can we expand?
Let’s focus on how we can expand our business. There are few growth strategies applicable to retail businesses.
?Embrace O & O
Expansion can be divided to two main categories Offline & Online or Physical & Virtual.
Offline or Physical strategies will be
?Online or Virtual strategies would be
?Offline expansion is the hard way of expanding a business compared to virtual strategies. This needs lot of work and consume lot of time. Below are some steps to fallow when opening a new location.
v??Get a Feasibility report
v??Collection of data – context of population, source of income, cultural mix & political movement of people
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v??Check for a better location with easy access. Specially check if there could be any construction, road expansion projects, water & electricity projects are happening in near future because those activities will slow down the walk – ins
v??Adhere to legal procedure of acquiring buildings & lands
v??Recruit new staff & start training them
v??Draw construction / renovation plans with interior & product display layouts
v??Fix date plans / deadlines for civil work, display arrangements & store opening
v??Arrange name boards & sign boards
v??Sign off civil work & complete the building
v??Fix name boards
v??Arrange display & VM
v??Do a grand opening. Invite all business crowed in the respective store surrounding, invite every possible person, road show, leaflet campaigns, live props, musical programs, street promotions, mobile announcements in the surrounding areas, poster campaigns, brand the whole city / town with your name, logo & colour are some ways to get maximum public interaction.
?If you are acquiring a new business or partnering with an existing one, there pros & cons and few points to consider when doing so is;?
v?Check the audited financial reports of last three / five years
v?Talk to all executive, management & other staff. Specially talk to all minor staff including labors, cleaners, peons & etc,
v?Check the status of the acquiring inventory & asses them
v?Check the current legal background of building & lands
v?Check business registration & other formalities
v?If there is a current debt collection / field asset; check the complete field and obtain a report. If it is a hire purchasing business, check the entire leased asset & do an age analysis on the debtor report
?Appointing dealers or opening franchise network is a bit easy work compared to the other strategies.?
v?Select areas / towns / locations to expand
v?Formulate a strong contract covering inventory, staff, cash handling, benefits & etc
?Online or Virtual expansion is bit of a easy task with less work load compared to offline expansion.
v?Hire a skilled person on social media marketing with adequate knowledge in creating web sites & handling online sales and give him a proper JD (job description) with clear KPIs.
?Retail expansion is more an action-packed subject. Draw a check list according to your strategy and constantly fallow up to meet the deadlines. Do not fall into the trap of loosing focus of existing operation so you will be lost in both ends. Appoint a capable person to handle either the new venture or the existing one so you will be safe on the both grounds. It is advisable to get involve with one strategy at a time. Analyze all methods to see which strategy you will use first. Depend on the size of your business and the nature of your operation, you can choose which way you’ll go first.
Remember to ‘catch a fish which fits in to your pan & leave the big ones, or you will be wasting your resources’ being too greedy is not anyway wise. When it is time for you to grow, fallow the principals, consult industry experts, ask from your network & consider your financial strength before finalizing a growth strategy. Over estimation or over confidence may lead you to a bankruptcy.
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7 个月Great read, Niroshan! ?? Your insights are always refreshing and thought-provoking. Thanks for sharing this! Keep the valuable content coming. ??