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Are you willing to see your business grow in a healthy and planned way? So you need to understand how to expand a business, after all, the process takes into account different elements such as the market, competition, business stability and your financial health.

Faced with the recent crisis caused by the new coronavirus pandemic, thousands of companies had to back down from their growth plans. However, 2021 began with optimism and growth prospects in most sectors of the economy. This is the case, for example, in the real estate sector .

If you are part of the group of entrepreneurs planning a business upgrade in the coming years, this article is for you.

We’ll talk about how to expand a company, the best time to bet on growth and the essential strategies to ensure a sure bet for the success of the business.

Good reading!

What is the ideal time to expand a company?

Every entrepreneur looks for ways to make his business grow . Therefore, understanding how to expand a company is a common goal among most investors.

However, before getting your hands dirty and designing an expansion plan for a business, it is necessary to understand what a company needs to grow.

Below, we point out two of the most relevant aspects that determine the best time to broaden horizons.

  • Financial conditions of the business: to understand how to make a company grow with quality, it is necessary to have a clear vision of the economic conditions of the business in mind. This includes the average ticket value of the business, the profit margin obtained and the value added to the product or service offered.
  • External context/market scenario: did you know that even crises can generate good business opportunities? Visionary entrepreneurs are able to take advantage of market conditions – even the adverse ones – to see ways to reformulate themselves, expand the product mix or increase sales. This is the case of delivery companies, which increased their average ticket by 187% during the new Coronavirus pandemic. 

What precautions are necessary for the expansion of a company and protection of its portfolio? 

In addition to understanding market conditions and the financial aspects of the business to determine the best time to expand a business, it is necessary to study the business thoroughly.

This is the ideal way to understand how to grow a company without jeopardizing the stability of the business and its product portfolio. See below some more points that contribute to this understanding.

1. Licensing of products or services

Before thinking about how to grow a business, make sure your product or service portfolio is protected. This means that, if necessary, it is important to invest in licensing before starting the growth strategy.

Thus, if the chosen expansion strategy has, as its essence, the sharing of technologies or the strategic planning of the business, the entire information base developed by the company remains its property, with no risk of deviation or misappropriation.

Learn more about the licensing process for companies, products or services with the INPI (National Institute of Intellectual Property) in the video below:

2. Business stability

Another essential factor to ensure a company’s healthy growth is the business stability analysis.

Before investing in expansion strategies, it is important to ensure that the enterprise is solidified, and that it has significant survival potential even after a merger (incorporation of another company) or compartmentalization (in branches or franchises).

3. Alignment between managers

Aligned management is essential for conducting a business expansion plan. If we are talking about the expansion of a family business , this aspect becomes even more important. After all, it is essential that everyone involved in the company’s administration is aligned on the growth strategy.

This prevents misunderstandings and the difference in strategic thinking influencing the delicate moments of consolidation of the expansion plan.

To avoid misalignment, our tip is: appoint a team to lead and closely monitor the creation and execution of the expansion plan. From there, hold periodic meetings to align expectations, update schedules and discuss issues inherent to the process.

How to prepare an expansion plan? 4 tips for not making mistakes

Now, we are ready to explain to you, in 4 steps, how to create an expansion plan! Our tips cover the process from start to finish and involve technical, analytical and practical steps.

Read on to know each one.

1. Ensure the business is stable (or growing) through a performance review

If you are following the tips given in this article, you will likely start running the “how to grow a business” practical guide to a great advantage.

This is because, in order to understand if the time to invest in growth is really right, it is necessary to carry out an analysis similar to this one, to attest to the maturity of the business and its chance to prosper in the midst of expansion.

The difference between the preliminary analysis and this one is that, in this case, the numbers raised need to be applied to a real expansion projection.

It is necessary to simulate the investment, sketch the expense and cost spreadsheets involved in the growth and, mainly, use big data (data intelligence) to understand the company’s behavior in different situations.

2. Design your goals

Second, in order to understand how to expand a company, it is essential to put on the agenda the design of tangible goals.

Remember that the objective is the target the company is aiming for . The achievement of this objective is facilitated when the company knows how to break it down into goals, which, in this analogy, work like the bow that points and propels arrows towards the desired target .

Want a golden tip on creating effective goals in achieving your goal? Then watch the video below to learn a little more about the SMART methodology (Specific, Measurable, Achievable, Realistic and Based on deadlines).

3. Immerse yourself in a thorough market analysis

Market analysis, as well as business performance assessment, is one of the steps present in the entire preliminary process of expanding a company.

However, as we pointed out earlier, this analysis needs to be done with more precision and detail. After all, we are effectively talking about the chances of success — or failure — of an expansion plan!

If your business operates in the b2b segment , it is necessary to combine market analysis with an in-depth study of the profile of customers with the greatest purchase potential and their relationship with the company.

Furthermore, it is important to involve large customers from the beginning of the expansion process. After all, they represent a sizable slice of the company’s profits and can help grow the customer base by making good referrals.

4. Prepare a solid marketing campaign to advertise the expansion

Like the company’s team of employees, the loyal customer base in contact with a company should not know about expansion through third-party news and publications.

To prevent this from happening, activate your marketing team and plan a campaign to announce the growth in a phased manner:

  • first, communicate to the internal team;
  • then activate the company’s main suppliers;
  • go to loyal customers who generate greater sales volume;
  • Then, announce the expansion to the general public.

Bonus Tip: Profitable Ways to Grow a Business

Now you know how to grow a business. The question we are asking right now is: what will be your modality of growth? The options are numerous, but you need to know how to match the opportunities with your business profile.

It is possible, for example, to invest in:

  • Merger and acquisition of companies: according to a PwC report , in 2020 alone, 638 merger or acquisition transactions were carried out between January and November 2020. This figure is 42% above the average of the last five years, which evidences a favorability of the market.
  • Franchising: according to the ABF , even in the midst of the new coronavirus pandemic, the franchising sector in Brazil surpassed the mark of R$43 billion in revenue , which consolidates the model as an investment format resistant to economic adversities.

If, after understanding how to expand a company, the last investment option caught your attention, we have an invitation to make: get to know the franchise model of IEV – Institute of Specialization in Sales , and understand how we transform our business into a network with more of 450 companies and 5,000 students across the country.

 

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