“Growth is never by mere chance; it is the result of forces working together.”
~ James Cash Penney, founder, JC Penney
Of course, you want your business to grow. Every employee, manager, executive, and owner wants to see more customers, higher profits, and a brighter future.
But sometimes businesses get into trouble when they rush too fast to grow their profits. They see dollar signs all around them but fail to see any warning signals that were staring them in the face.
There are a number of business growth strategies to consider:
- Market Penetration-selling more of your product or service to your existing customer base.
- Market Development-targeting new markets with your existing product
- Product Development-developing new products to sell to your existing customers
- Diversification-developing a new product for a new market
Leaders who want to grow their business have a natural curiosity and ask meaningful questions. They get their employees involved so they can look at expansion from multiple angles.
Before rushing into expanding your business, a few key questions need to be asked and answered:
- How far in the future is the plan for?
- What are the trends affecting your business in the near, medium and long-term?
- How will expanding affect your current business model and execution?
- How will your current customers be affected?
- How will your vendors, distributors, and suppliers be affected?
- Will expanding create solutions to today’s problems? Or next year’s or next decade’s problems? Have you thought out what those problems might be?
- What type of outside help will you need to expand?
- What are the obstacles to expanding? What are you sacrificing today in order to grow for tomorrow?
Here is a great example of failing to plan properly.
Many of you know I have worked in the cruise industry for many years. I am just back from a two-month stint in China.
When cruising out of Asia first started about 15 years ago, many ships sailed out of a small pier in Shanghai. The Chinese government saw the future potential for cruising and the bigger ships that were being built. They decided to build a new larger pier outside of downtown Shanghai that could hold these larger ships and the many thousands of passengers that would board them each week.
They built a beautiful, modern pier that could hold up to four large ships at any one time, along with a terminal that could hold thousands of guests who must go through customs and immigration procedures, both before and after the cruise.
But they failed to plan for parking.
Parking is required for the many cars the local passengers wanted to drive and park at the pier, and for the many buses that would be bringing the guests. There was little room for the buses to maneuver and drop off the passengers. Some lucky guests can be driven and dropped off right at the pier, but many buses are not allowed into the port to drop off the passengers.
So guests of all ages are dropped off at the entrance to the pier and have to walk, WITH THEIR LUGGAGE, about ¼ mile (about ½ km). Can you imagine kids, parents, infants in strollers, grandparents and even great-grandparents walking that distance in the freezing cold or blistering heat just to get to the ship?
What a way to start a vacation! Suffice to say, not the best planning by those in charge.
One last point I would suggest when planning for the future. Before any plans are finalized, have someone (inside or outside your company) become a devil’s advocate.
Have them go over all the plans and purposely question why certain decisions were made. Have them walk in the shoes of your customers to see what possible problems might arise. Have them be the voice of the customer. Welcome their feedback. While it might delay your implementation, it will save you time, money and aggravation down the road.
Growing a business can be an exciting time, but it’s important to take the time needed to ask the right questions, and focus on what’s best for your customers and employees.
Do it right the first time and watch your profits soar. Do it wrong, and it could be the beginning of the end. And I’m sure that’s not in anyone’s plan.