If you have a thriving business and are looking to expand, then you are likely looking into funding for it, but more importantly, you need to tell those investors how you’re going to expand. This is one of the first questions that anyone gets asked when they ask for investments to expand their enterprise.
There are many ways of expanding, of course. You can merge with another company or acquire one, but here we’re going to look at the most common form of expansion, which is a physical increase in the size of your business. What form this takes, primarily relies on the nature of your business. A franchise, for instance, exists to expand into new areas, open new locations, and hire new people.
There are other places that don’t need to move into new locations in order to survive and expand. An example of this would be a soap-manufacturing company that’s looking to expand its operations. If they’re looking to increase the amount of soap they provide to the market, one option may be to simply invest in better, more efficient machinery. They might also look into expanding their operations in the same city, by either opening a new factory elsewhere in the area, or by simply expanding the size of their current facilities. However, if this soap company is looking to expand into another country, then it would likely be in their interest to open a factory in that country.
The only question that really needs to be asked in these questions is this: does your business need to expand into other areas in order to thrive? If the answer is yes, then you need to consider how to expand. If you’re operating a chain business, then expansion into other areas is a must. The question is to ask yourself which areas, however. There are local chains that do very well in their local areas, but fail when placed too distantly from the original locations, and such a decision is likely to spook potential investors. There are, however, chains whose business it is to serve an entire state or province, and having two in the same area would be redundant. In this case, a more far-flung new location is a must. There are smaller businesses that slowly expand over a longer period of time. These ones occupy a place, establish themselves, and then gradually reach out into other, more immediate areas. This is not just a good approach, but is essential for some businesses, that need to establish their brand in order to expand. If you open a location a thousand miles away, but no one knows what you are there, then you’ve undermined your newly funded enterprise before you’ve even started. With others, rapid expansion is a must, especially if you’re manufacturing a product. In this event, more far-flung locations can actually be helpful.
Whatever the decision you make, ensure that you take the time and effort necessary to come to your conclusion, and you’ll likely end up being happy with it.