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For those of you who started up and weathered the teething problems and are wondering how to take the next step and grow your business beyond its current status—there are numerous possibilities, 20 of which we’ll outline here.

1. Open another location
This might not be your best choice for business expansion, but it’s listed first here because that’s what often comes to mind first for so many entrepreneurs considering expansion. “Physical expansion isn’t always the best growth answer without careful research, planning and number-planning,” say experts.

One can check the following tips before considering another location:
*Make sure you’re maintaining a consistent bottom-line profit and that you’ve shown steady growth over the past few years.
* Look at the trends, both economic and consumer, for indications on your company’s staying power.
* Make sure your administrative systems and management team are extraordinary—you’ll need them to get a new location up and running.
* Prepare a complete business plan for a new location.
* Determine where and how you’ll obtain financing. (See “Got Cash?” for financing tips.)
* Choose your location based on what’s best for your business, not your wallet.

2. Franchise you business
Think about turning your business into a franchise or business opportunity. While most home-based businesses remain small, yours may have the potential to hit the big time through franchising, licensing or wholesale distribution. The key question to ask yourself is if your business can be converted into a business format that somebody else could operate (a franchise) or if you have a standardized product or service that someone could resell multiple times (a business opportunity).

While you may think that expanding your business requires raising capital, hiring employees, buying equipment and leasing office or warehouse space, it’s often more profitable—and less risky—to license your product to a big corporation with manufacturing capabilities and an existing sales force to do the work for you.

Well, you got to be doubly sure before taking this route to grow, as it involves huge managerial issues. But this is the fastest and sure-shot way to growth. First you will need to streamline your internal systems and marketing and then select the location you want to spread your business to.

3. License your product
This can be an effective, low-cost growth medium, particularly if you have a service product or branded product. You can receive upfront payments and royalties from the continued sales or use of your software, name, brand, etc.—if it’s successful. Licensing also minimizes your risk and is low-cost in comparison to the price of starting your own company to produce and sell your brand or product.

To find a licensing partner, you should start by researching companies that provide products or services which are similar to yours. But before you set up a meeting or contact any company, you must find a competent attorney who specializes in intellectual property rights. This is perhaps the best way to minimize the risk of losing control of your service or product.

4. Diversify
Diversifying is an excellent growth strategy as it allows you to have multiple streams of income that can often fill seasonal voids and, of course, increase sales and profit margins. Rolling out the new lines allow you to expand the reach and thus sales. It will also broaden the target audience and increase presence in the marketplace, giving you the credibility to approach much larger retailers.

Once you’ve hit on a product or service that customers really like, don’t miss the opportunity to bring out related items to diversify your product line. Not only does that give your customers a wider selection, but it also makes your products more appealing to retailers, who typically like to stock a line of products as opposed to a single item.

Some of the ways you can diversify are:
* Sell complementary products or services
* Teach adult education or other types of classes
* Import or export your or others’ products
* Become a paid speaker or columnist

5. Merge with or acquire another business
Well, this is how most big corporations of the world became really big. But you should have the capacity to manage one. The advantages are many. A merger or acquisition increases your size overnight. In addition, you staff strength also grows, giving you the capacity to execute larger projects. Besides, it will also give you access to newer technologies, products and geographies overnight.

6. Expand globally
But you don’t need to acquire another business to expand globally. You just need to prime your offering for an international market. You’ll also need foreign distributors who’ll carry an inventory of your product and resell it in their domestic markets. You can locate foreign distributors by scouring your city or state for a foreign company. Trade groups, foreign chambers of commerce, and branches of Indian chambers of commerce in foreign countries are also good places to find distributors you can work with.

7. Expand to the Internet
Thanks to the Internet, it’s no longer necessary to open a store to reach retail customers. For marketers of specialty products like rare books, collectibles and gourmet foods, a web-based boutique lets you reach millions of shoppers around the world without paying for rent, utilities or garbage collection. And while creating websites once required a big investment and the skills of an experienced web designer or programmer, do-it-yourself websites are now available for less than Rs.1,500 a month with no technical knowledge required.

Typically, the companies that help you register your domain name (web address) will provide online templates you can use to build your site, host your web pages on their server and provide you with multiple e-mail addresses as well. E-commerce capabilities can often be had for an additional charge. You can also set up low-cost websites through web hosting companies and search engines.

8. Find ways to increase sales to your existing customers
It’s a lot cheaper than finding new ones. Even if you can’t expand your product line, you can boost revenues by selling more of your existing product or service to the clients you already have. One easy way to do this is through volume discounts. Especially if your products cost little to produce, offering your customers the chance to buy, say, two T-shirts for the price of one lets you ring up additional sales without sacrificing much profit.

Another common practice is to reward loyal customers by giving them a punch card that entitles them to a free product or service for every 10 items they buy. This technique is common at hair salons, car washes and arts-and-crafts stores, but home-based businesses can use it, too.

9. Join forces with another business to promote your company
Partnering with a company in a related industry is one of the cheapest and easiest forms of marketing that you can employ. If you make spa products, for example, you may be able to convince a local health club to carry them in its store by offering a discount to its members. Likewise, you can send a free, one-day health club pass to anybody who buys your lotions and scrubs.

10. Breaking down tasks to last activity in system
Prima facie, what is essential is a broad understanding of what you want to achieve in a business for which no short-term vision is adequate. A long-term perspective has to be drawn, breaking it down to the nitty-gritties of business, in terms of proposed turnover, markets and customers that have to be serviced and identification of personnel to implement activities successfully from among existing team members.

Alternatively, check whether some activities of the company can be outsourced. P.G. Subramaniam, CEO, ASAP Management Consultants, says that the decision on outsourcing some activities of the company will depend on the entrepreneur’s ability to perform and generate returns on investment and not be determined by costs involved on  outsourcing, as these are usually long-term costs.

11. Banking on networking
The upcoming entrepreneur will have to bank on his own networking circle as well as on interactions with colleagues, vendors and customers for growing the contact base of the company. Some professional networking sites like LinkedIn are useful in providing information on people involved in various activities provided you are able to identify them and reach out to them. Small startups can also expand their networking base in their own industry by tapping the contacts of friends who are in the same line of business.

12. Focusing on cash flows
Upcoming entrepreneurs tend to ignore or undermine the significance of understanding cash flows. This includes keeping a track of funds in terms of revenue earned through sale of products and planning expenses on production and other activities. This would mean maintaining a cash book and recording expenses on actual accruing basis for operational purposes.

Depending solely on funding received from venture capitalists is not advisable as money generated from one’s own business is important for operational efficiency and for meeting daily expenses. Loans or large fundings can be deployed in meeting system and infrastructural needs of the company.

13. Result-linked reward system for employees
In small startups, attrition tends to pose a problem, hence retaining and attracting talent is important. Talent can be tapped through the networking route and then retained by adopting a result-oriented reward system. This would also call for transparency in the operating system, leaving no room for error in zeroing down on the deserving person or persons. Ideally, maintaining a personal rapport with your co-workers, with a certain freedom to innovate in work, helps in retaining talent.

14. Strengthening regional footprint first
Before panning out to an all-India level from its regional roots, the company has to first have a strong regional footprint. To move to the national level, the company has to be stable and profitable at the regional level. Thereafter, the entrepreneur has to understand the company’s bandwidth to grow and hire people who have worked earlier in a national company and possess the competencies to help him achieve that level. Such achievers have to be remunerated accordingly, for which the upcoming company has to be prepared to shell out adequate money from its profits.

Capital funds for going national can be accessed through initial public offerings, private placements, bank funding, venture capitalists and market development funds from the government of India. A focus on enablers for every activity like customers and sales will facilitate the process.

15. Risk taking
L. Ganesh, Chairman, Rane Group, has highlighted some points that need to be kept in mind while growing one’s business: “The leader must have the ability to take calculated risks. Despite all the financial evaluation and due diligence, the final decision—especially on new ventures—is always fraught with risk.”

The culture in the organization, especially among the top management, must be one with the ability to take decisions with many uncertainties and then, course, correct  these as required without getting bogged down by either problems or failures.

16. Perseverance
Any business will go through ups and downs both due to external reasons or internal problems. It is therefore very important that a leader, and indeed the top management team, should have the perseverance to stick to their vision and goals despite such fluctuations. This should not be confused with rigidity or obstinacy. The goal can still be rigid but the path is to be flexible, depending on the journey. Successful leaders are those who have this ability to persevere through severe trials and turbulences.

17. Hard work
Leadership always means leading from the front. This would mean sustained hard work for a long period of time. It may be fashionable to talk about working smarter and not harder. “I believe that such an approach will work in deal making and not in building and growing an organization over a long period. Growth often means very hard work in the initial stages till the organization gains a momentum,” says Ganesh. Thereafter, to take it to a different trajectory again, hard work is required from the leadership team.

18. Ability to choose good leaders
The most important event or decision in any organization is to choose the leader. Leadership is not often evident in the external behavior of people and definitely not related to academic qualifications. To spot a good leader and groom him or her with a good sense of timing is important.

The other aspect is the ‘fit’. Leaders often perform well if the fit or culture of the organization is conducive to their style. It is only an exceptional leader who can change the culture when it warrants and still make it a success.

19. Empowerment
Empowerment is extremely important, particularly after a point in the growth of any organization. It is very difficult to define this point but the leader has to sense the same out of experience and start increasing the empowerment. A hands-on closely controlled management style is very effective in smaller organizations.

However, the same style starts stunting the growth of organizations beyond a point. A good leader will sense this point and also design the right kind of empowerment, still having a good system of review to keep the organization on track.

20. Institutionalization
Growth would mean the transition of an organization from a one-man show or a partnership of few key people to a large professionally managed organization. It is one of the most important objectives of a leader to start working on this system and only then will there be a good foundation for smooth growth. If not, the organization can grow rapidly but at some stage start collapsing without this professional foundation.

©Entrepreneur May 2010

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business, grow