6 Common Business Expansion Strategies for Entrepreneurs

To realise your ambitions for business growth, you’ll need to adopt the right expansion strategy. Weighing up the options can leave you feeling daunted by the responsibility and as an entrepreneur, you’ll be looking to find a strategy that involves the least amount of risk and effort.

At times like this, you might be thinking that you could really do with a professional sounding board. Someone who ‘gets’ your vision, has your back and shares your focus on translating vision and strategy into deliverables in your business. Our CFOs give their clients this support, but you might also talk to a business mentor, coach or even a friend whose judgement you trust.

The 6 common business expansion strategies:

1. Increase your market penetration by selling more products or services to your existing customers.
2. Expand your market by moving into new areas, territories or countries.
3. Increase the range of products or services you offer to customers.
4. Diversify your existing products or services to attract different customers.
5. Use new channels to sell your products or services such as setting up an ecommerce site, selling through social media channels, direct mail catalogues, joint venture partners or affiliate partners.
6. Acquire or merge with another company (to increase market penetration, market expansion, product diversification, and market share). You could buy or merge with a competitor, a supplier or a distributor to achieve your growth objectives.

The risks involved in expansion

As you weigh up options for business expansion strategy, consider which presents the best match for your company. To do this, you’ll need to appraise the demand for your products and services, your competition, the size of your market and market conditions. Once you have this information to hand, you can select the growth strategy that matches your situation.

As you can see, most of the above strategies will lead to organic business growth. Although this typically takes longer, it often feels safer, and you can put systems in place gradually to match the increases in customers and employees. You can tap into specialist expertise at the right time and de-risk each decision as it arises.

The exception in this list is option 6, the acquisition of or merger with another company. This strategy can be riskier than relying on organic growth because you’re bringing together two different operations and integrating cultures and teams. But the rewards can be great as when an acquisition or merger is successful, it can accelerate your company to achieve rapid growth.

If you are an entrepreneur facing the challenge of balancing out these risks or opportunities on your own, it can be tough to keep a clear focus on all the factors in the decision. We completely understand how this feels. Our CFOs work one-to-one with clients, or as an expert team where a company needs specialist advice, to help them build winning growth strategies. Read here on for insights into how to avoid the challenges of growth.

De-risk your scale-up with a highly skilled, experienced CFO. The first step is easy. Just book a no-obligation, 30-minute discovery call by dialling 0800 169 1499 or completing our contact form. Our in-house team is here to help get your business scale up journey underway.