When to Expand
I was recently traveling and was asked in three different countries, “I continue to lose good people that leave me and go out on their own, what should I do?” The answer from me was the same, “you must expand in order to provide new opportunities for talent.” Companies that stay small lose talent to those committed to continued expansion. Expansion creates opportunity.
It got me thinking about when the right time is and exactly how to expand. I started doing some research and found that 21 million of the 28 million small businesses in America have zero employees. That is a serious commitment to staying small. Then I found this article titled The 7 Critical Questions to Ask Yourself Before You Expand online.
Most people would respond to these seven saying you need to think about it, rather than doing it. These were the seven tips they suggested at SelfEmployed.com article:
1. What’s your strategy
2. What locations are you considering
3. Is market conducive
4. Can you finance it
5. Do you have the manpower
6. Do you have the technology
7. Do you have customer support
The answer to each of these will most likely put you in doubt about expansion rather than cause you to do what is necessary to expand.
The single biggest mistake I have made in my business career was overthinking expansion and not going at it hard enough, big enough and fast enough.
Expanding is like having kids, you will never be fully ready for them, or it, until you do it. While each of the points in the article are important you need to first clarify why you must expand.
By definition the word, expand means to spread out, increase in size, become larger, enlarge. The opposite of expansion is to shrink, contract, or scale down. Staying your current size is an impossibility as it will always result in you becoming smaller. In physics, the word expansion means to undergo a continuous change.
In the world we live in today you must change. While many things stay the same, the ways in which you might get things done are changing. Products continue to change, how people get information is changing, technology advances, communication abilities change – the bottom line is if you don’t change (expand) you shrink or cease to exist.
Other than me writing this article, I would expect no person has ever told you to expand. I know that no one ever told me to get bigger, instead they would say, “smaller is better and more controllable.” Another person told me “by staying small you can offer better service and be more profitable.” In all my business classes in college there was no course on why expansion was vital to my survivability.
I believe, without exception, that any business that refuses to expand will cease to exist.
Look at the great companies today: Starbucks, Google, Caterpillar, Apple, Toyota, Ritz, Netflix, Amazon and the likes. They all make themselves available in many markets and at many levels. Great companies no longer simply focus on being great in very narrow (vertical) markets but they go wide (horizontal) and expand their product line-ups, their customers, and their market reach.
It was not until Apple went horizontal with their product beyond computers with iPods, tablets, phones, Apple TV and iTunes that Apple soared. Can you imagine what would happen to Apple without just the iTunes revenue from apps?
Push your potential until you change your zip code, address, customers and become omnipresent.”
You must go deep and wide and regardless of what the board, CFO, your partner or family tells you. What you must know about expansion:
What you must know about expansion:
1. Expansion allows for new opportunities to find talented people and provide talent with a place to go (move up) so that you can keep them.
2. If you don’t expand you will contract – there is no such thing as staying the same or staying small.
3. Expansion allows for a broader customer base that makes you less dependent upon customers that don’t appreciate you and won’t pay you a fair margin. You only get a better quality customer going horizontal.
4. Expansion allows you to discover better markets that offer more favorable conditions. I moved to Miami to find better conditions to operate my business. That was a horizontal move.
5. Expansion will make it possible for you to never be dependent upon one set of market conditions or customers.
6. Expansion provides the opportunity to become omnipresent which I discussed in The 10X Rule in detail. Anything that attains this position of omnipresence is assigned power by the marketplace. Consider Starbucks as a great example of being everywhere.
While expansion has its risk and when not properly executed can be expensive and chaotic in the early stages if you don’t expand you will be terminated from the playing field. What is necessary to expand requires, a) a commitment to expand, b) a push for new revenue, c) ability to manage cash flow, and d) phenomenal courage to see the expansion through because almost everyone will try to talk you out of it; including yourself.
I spend an hour discussing this here, where I go over five simple ways you can start to expand your business.
Here are those five tips:
1. Social Media postings using every medium possible. I use Facebook, Twitter, LinkedIn, and Google+ every day. I don’t have a favorite social medium, I use them all.
2. Streams like Meerkat and Periscope, Ustream and Youtube are great ways to push content out in video.
3. Articles – Anyone can write an article today. I am living proof of that with this one. I publish at least three articles a week on topics (like this) on those things I can offer value and I know they all have grammar errors.
4. Start by reaching out to similar markets. If you are in real estate start pitching your offer to those industries similar or that are symbiotic. If you sell social media to car dealers start sharing your offering with the real estate industry.
5. Reach out to friends in other cities/countries so that when you travel there you start speaking to other audiences to craft how your message fits them as well. Do whatever it possible to start expanding into other audiences horizontally by offering free presentations.
Again the single biggest mistake I made in my entire business career was going vertical and focusing on one market for too long without going horizontal at the same time. Don’t make that mistake.
My businesses would be worth 50X more today had I known that I must expand to survive. Before you question yourself about strategy, locations, new markets being conducive, financing, manpower, technology and customer support understand that expansion is not a choice it is your survival.
Here is the recorded stream, When to Expand I recently delivered, available to premium members of my digital entrepreneurial network, MYGCTV.com.
Be Great and Expand and remember “push your potential until you can change your zip code.”