Planning for expansion

2/16/2011

Now that small business lending practices are beginning to ease up and entrepreneurs have greater access to commercial loans, there is one thing on the minds of many company owners: expansion. While many businesses focused on customer retention during the recession, this year will be the first time since 2008 that many organizations are in a good position to begin prioritizing growth.

Regardless of how grandiose companies' growth plans are, they still need to ensure that they are well organized. If entrepreneurs haven't carefully planned out their expansion, they could end up wasting more money than they can make from growth.

The Scotto family, which owns a restaurant in New York, recently undertook a growth campaign as they rolled out a new line of frozen food products nationally. The family told Inc. magazine that their success was based on four factors: quality control, social media usage, willingness to experiment and focusing on their strong points.

1. Ensure quality products and services

More often than not, when small businesses are successful, it's because they have a high-quality product or service. They can't compete with bigger companies on price or marketing budgets, so they need to develop a product that outclasses their competitors or reaches a niche that has been ignored by mainstream organizations.

Elaina Scotto told Inc. magazine that this was the case with her family's New York restaurant. Whether she was designing dishes for the restaurant or the frozen food line, new offerings would be tested for months before release to ensure a high quality. When expanding nationally, the family continued to focus on developing premium dishes to maintain its reputation.

2. Focus on what differentiates companies

Another reason that many small businesses succeed is that they offer consumers something that no other company does. It may be something like a brand new product not available at any other store or something as simple as a free box of cookies with every order online. Whatever that element is, it will become even more important as companies begin to expand.

For the Scotto family, it was the fact that they were a family that put their other professions on hold to cook together and run a restaurant. "We're a family that lives and works together, but we're very diverse," Elaina told the source. "There are very few families on TV cooking together."

3. Leverage social media

The first thing small businesses need to do when expanding is reach broader audiences, and social media can help them to do just that. Whether they are advertising to the 500 million consumers on Facebook or sending test products to influential bloggers, it's critical that businesses engage their fans on a personal level.

"It's all about Facebooking, Tweeting and friending people," Elaina told Inc. magazine. "It's huge. When we introduced new dishes for the frozen food line, we invited top bloggers to come and taste it. And they spread the word."

4. Don't be afraid to try new things

Expanding is a new process for many small businesses, filled with new challenges and obstacles to overcome. To succeed, entrepreneurs can't be afraid to gamble and take chances. Whether it's trying a new marketing approach or a new line of products or services, company owners should leave themselves open to any and everything.

"We fought social media for a long time," Elaina explains. "Now we get it and know you have to do it. Maybe an app is something we'll do next."

With President Barack Obama looking to help small businesses export internationally, 2011 is as good of a time as any to starting planning global expansion strategies. Entrepreneurs just need to take the aforementioned elements into consideration.